The arecoline REM induction test, a measurement of central cholinergic sensitivity, was performed in 10 patients with atypical depression. Arecoline induced REM sleep significantly more rapidly than placebo. Atypical depressives without evidence of anxiety, in particular those without panic attacks, had a more rapid REM induction response to arecoline than atypicals with anxiety symptoms. We compared our atypical depressives with normal controls and affectively ill patients studied in other laboratories. The rapid REM induction response observed in atypical depressives without anxiety was comparable to that seen in endogenous depressives and euthymic bipolars. Previous studies have demonstrated the presence of cholinergic supersensitivity in the latter two groups of patients. Our results suggest that atypical depressives may be distinguished in their response to arecoline based on their anxiety history, and that cholinergic supersensitivity is present in atypical depressives without anxiety. Additional studies with larger samples and simultaneously studied control groups are necessary to test these preliminary findings.