The effects of a cholinergic antagonist (scopolamine) and agonist (physostigmine) on the auditory middle latency evoked responses (MLRs) were studied in 7 normal male volunteers. Scalp recordings were made from a central (Cz) electrode referenced to linked ear lobes on one channel and to a non-cephalic, sternovertebral reference on a second channel. Three components were statistically analyzed for changes in latency and amplitude: Pa, with peak positivity in the 25-40 msec latency range, Nb, with peak negativity 40-50 msec, and P1, with peak positivity 50-65 msec. Control recordings included responses to click rates of 1, 5, 8 and 10/sec; as has been previously reported, P1 showed a marked decrease and disappeared at the faster rates of stimulation whereas Pa showed no change in amplitude. Intravenous injections of scopolamine resulted in a rapid and complete disappearance of P1 and a slight increase in Pa; concurrently, the subjects reported feeling drowsy but were awake with eyes open through the recordings. Subsequent injections of physostigmine resulted in a rapid reversal of the scopolamine effects so that the subjects became alert, Pa decreased, and P1 reappeared and increased to control amplitudes. Rapid click rates caused P1 to diminish, as in the control period, indicating a common P1 recovery cycle in both the control and physostigmine conditions. These data are discussed in terms of the hypothesis that the P1 generator system is comprised of a cholinergic brain-stem-thalamic component of the ascending reticular activating system.