Humans are typically unable to engage in sustained smooth pursuit for imagined objects. However, it is unknown to what extent smooth tracking occurs for visual imagery during REM sleep dreaming. Here we examine smooth pursuit eye movements during tracking of a slow-moving visual target during lucid dreams in REM sleep. Highly similar smooth pursuit tracking was observed during both waking perception and lucid REM sleep dreaming, in contrast to the characteristically saccadic tracking observed during visuomotor imagination. Our findings suggest that, in this respect, the visual imagery that occurs during REM sleep is more similar to perception than imagination. The data also show that the neural circuitry of smooth pursuit can be driven by a visual percept in the absence of retinal stimulation and that specific voluntary shifts in the direction of experienced gaze within REM sleep dreams are accompanied by corresponding rotations of the physical eyes.