Microinjection of the acetylcholinesterase inhibitor neostigmine into the dorsal pontine tegmentum of intact, freely moving cats produced significant changes in electrographic desynchronized (D) sleep signs and D sleep-like behavior. The percentage, frequency and duration of D sleep signs were increased and the latency to onset of D sleep signs was significantly reduced after neostigmine administration. The effects of neostigmine were dose-dependent and could be blocked by centrally administered atropine. This is the first demonstration that microinjection of an acetylcholinesterase inhibitor into the pons enhances D sleep signs. These data suggest that endogenously released acetylcholine can initiate and maintain the state of D sleep and strongly support the cholinergic hypothesis of D sleep generation.