Release of acetylcholine within the pontine reticular formation (PRF) from the axon terminals of mesopontine cholinergic neurons has long been hypothesized to play an important role in rapid eye movement (REM) sleep generation. As some of these cholinergic neurons are known to contain substance P (SP), we used anatomical, electrophysiological and pharmacological techniques to characterize this projection in the rat. Double immunofluorescence demonstrated that 16% of all cholinergic neurons within the mesopontine tegmentum contained SP; this percentage increased to 27% in its caudal regions. When double immunofluorescence was combined with retrograde tracing techniques, it was observed that up to 11% of all SP-containing cholinergic neurons project to the PRF. Whole-cell patch-clamp recordings from in vitro brainstem slices revealed that SP administration depolarized or evoked an inward current in a dose-dependent manner in all PRF neurons examined, and that these effects were antagonized by a SP antagonist. The amplitude of the SP-induced inward current varied with changes in the Na+ concentration, did not reverse at the calculated K+ or Cl- equilibrium potentials, and was not attenuated in the presence of tetrodotoxin, low Ca2+ concentration or caesium ions. These data suggest that activation of a tetrodotoxin-insensitive cation channel(s) permeable to Na+ is responsible for a SP-induced inward current at resting membrane potentials. The depolarizing actions of SP appeared to be primarily due to activation of the adenylate cyclase pathway, and were additive with cholinergic receptor activation even at maximal concentrations. These data indicate that SP is colocalized in a subpopulation of mesopontine tegmental cholinergic neurons projecting to REM sleep-induction regions of the PRF, and that actions of these two neuroactive substances on PRF neurons are additive. If SP is coreleased with acetylcholine, the additive actions of the two neurotransmitters might heighten the excitability of postsynaptic PRF neurons and ensure the initiation and maintenance of REM sleep.