The organization of components of the reticular activating system and their role in sleep-wake mechanisms and arousal are described. A functional model is proposed based on known neuroanatomical and neurophysiological findings. The involvement of these elements of the reticular activating system in various neurological and psychiatric disorders is discussed. A series of hypotheses are advanced to account for the role of these nuclei in such diverse disorders as schizophrenia, post-traumatic stress disorder, REM behavior disorder, Parkinson's disease and narcolepsy. This line of reasoning suggests that, when neurological or psychiatric disorders manifest symptoms related to arousal and sleep-wake control, disturbances of elements of the reticular activating system must be considered responsible.