We studied the neural correlates of rapid eye movement during sleep (REM) by timing REMs from video recording and using rapid event-related functional MRI. Consistent with the hypothesis that REMs share the brain systems and mechanisms with waking eye movements and are visually-targeted saccades, we found REM-locked activation in the primary visual cortex, thalamic reticular nucleus (TRN), ‘visual claustrum’, retrosplenial cortex (RSC, only on the right hemisphere), fusiform gyrus, anterior cingulate cortex, and the oculomotor circuit that controls awake saccadic eye movements (and subserves awake visuospatial attention). Unexpectedly, robust activation also occurred in non-visual sensory cortices, motor cortex, language areas, and the ascending reticular activating system, including basal forebrain, the major source of cholinergic input to the entire cortex. REM-associated activation of these areas, especially non-visual primary sensory cortices, TRN and claustrum, parallels findings from waking studies on the interactions between multiple sensory data, and their ‘binding’ into a unified percept, suggesting that these mechanisms are also shared in waking and dreaming and that the sharing goes beyond the expected visual scanning mechanisms. Surprisingly, REMs were associated with a decrease in signal in specific periventricular subregions, matching the distribution of the serotonergic supraependymal plexus. REMs might serve as a useful task-free probe into major brain systems for functional brain imaging. Hum Brain Mapp 2009. © 2008 Wiley-Liss, Inc.