The short-term effects of the intraperitoneal administration of dl-propranolol on the wake-sleep cycle of the rat were studied in relation to the cyclic AMP concentration in the preoptic region and cerebral cortex. The results show that propranolol, but not saline, affected all stages of the wake-sleep cycle, increasing wakefulness, decreasing synchronized sleep and abolishing desynchronized sleep. These effects were associated with a decrement in cyclic AMP concentration both in wakefulness and synchronized sleep. However, this decrement was relatively larger in the preoptic region than in the cerebral cortex. The effects of the drug on cyclic AMP accumulation were also studied in hypoxia, a condition of unspecific brain stimulation. In this condition, the cyclic AMP concentration in both brain regions was found to be higher than that observed during either wakefulness or synchronized sleep. In the hypoxic condition propranolol was found to decrease the nucleotide concentration to the same levels observed in wakefulness and synchronized sleep following its administration. However, no difference in the relative magnitude of the decrement was found between the preoptic region and the cerebral cortex. These findings suggest that in both brain regions the drug acts on a cyclic AMP accumulating system, which may be defined as propranolol-sensitive. The activity of the propranolol-sensitive system in the preoptic region would appear to be related to wake-sleep processes.