In contrast to sleep studies of adult depressives that have consistently demonstrated abnormalities of sleep continuity, slow-wave sleep, and REM sleep, existing studies of depressed children and adolescents have been conflicting. Furthermore, only one study has explored the cholinergic regulation of sleep in early-onset depressives. In the present study, the electroencephalographic sleep of 20 adolescent outpatients with major depressive episodes and 13 normal control adolescents was obtained on two separate 2-night sessions, 1 night incorporating challenge with scopolamine. Depressed adolescents showed increased baseline phasic REM sleep measures, increased arousals, a trend toward reduced slow-wave sleep, and a greater difference in the change of first REM period density on the scopolamine night versus placebo night compared to controls. These findings support the continuity of some sleep abnormalities of depression into adolescence, and suggest that adolescent depression may be associated with alterations of cholinergic neurotransmission in some patients.