Urotensin II (UII) is a cyclic neuropeptide with strong vasoconstrictive activity in the peripheral vasculature. UII receptor mRNA is also expressed in the CNS, in particular in cholinergic neurons located in the mesopontine tegmental area, including the pedunculopontine tegmental (PPT) and lateral dorsal tegmental nuclei. This distribution suggests that the UII system is involved in functions regulated by acetylcholine, such as the sleep-wake cycle. Here, we tested the hypothesis that UII influences cholinergic PPT neuron activity and alters rapid eye movement (REM) sleep patterns in rats. Local administration of UII into the PPT nucleus increases REM sleep without inducing changes in the cortical blood flow. Intracerebroventricular injection of UII enhances both REM sleep and wakefulness and reduces slow-wave sleep 2. Intracerebroventricular, but not local, administration of UII increases cortical blood flow. Moreover, whole-cell recordings from rat-brain slices show that UII selectively excites cholinergic PPT neurons via an inward current and membrane depolarization that were accompanied by membrane conductance decreases. This effect does not depend on action potential generation or fast synaptic transmission because it persisted in the presence of TTX and antagonists of ionotropic glutamate, GABA, and glycine receptors. Collectively, these results suggest that UII plays a role in the regulation of REM sleep independently of its cerebrovascular actions by directly activating cholinergic brainstem neurons.