The role of nicotine as an indirect cholinergic agent in sleep has been studied in normal subjects. There are no studies of its effects on sleep in depressed patients. Nicotine transdermal patches (17.5 mg), were studied in eight depressed patients (DSM-III-R) and eight normal volunteers. Subjects wore placebo and nicotine patches for 24 h. Depressed patients showed increased REM sleep without changes in other sleep variables. They also showed a short term improvement of mood. Normal volunteers had sleep fragmentation, and reduction of REM sleep time. No major side effects were reported in either group.