Neocortical and hippocampal EEG was recorded in ten rats subjected to bilateral lesions of the lateral hypothalamus at different levels of its rostro-caudal axis. In nine rats the damage evoked a marked increase of waking time with a simultaneous reduction of the percentage of large amplitude irregular activity related to slow wave sleep in the first eight postlesion days. There was also a decrease in the amount of paradoxical sleep. Enhanced waking coexisted with behavioral somnolence. The most extensive hypothalamic lesions produced qualitative changes of EEG concerning mainly the frequency of hippocampal theta rhythm. Control lesions within the subthalamic region did not influence either qualitative or quantitative EEG pattern. It is concluded that limited lesions of the lateral hypothalamus did not destroy a sacient number of reticular activating fibers to disturb a cortical desynchronizing reaction. The increased amount of waking pattern may be due to serotonergic deafferentation of the neocortex. Dissociation of behavioral and EEG indices of the level of arousal imply the existence of separate neuronal systems for both aspects of activation.