We compared central cholinergic responsiveness (using the latency to induction of rapid eye movement sleep after arecoline challenge as a response marker) in 90 subjects: patients with major depressive disorder (MDD) (n = 53), nonaffective psychiatric controls (n = 17), and normal controls (n = 20). MDD patients as a whole showed a supersensitive cholinergic response compared to nonaffective patients and normal subjects. Further analysis indicated a strong association between cholinergic supersensitivity and endogenous subtype of MDD, including a significant correlation with specific endogenous features such as distinct quality of mood, anhedonia, lack of reactivity, and agitation. Unlike rapid eye movement (REM) latency (a more conventional physiological marker), cholinergic sensitivity did not correlate with age or severity of illness but only with the presence of endogenous features. Previously described sleep physiological correlates such as REM latency and REM density of the first REM period also distinguished between endogenous and nonendogenous MDD. There was a statistically significant correlation between REM latency and arecoline REM induction response.