Almost a century ago, Constantin von Economo observed that in patients with encephalitis lethargica lesions in the upper brain stem and posterior hypothalamus impaired consciousness. From lesion studies in cats and anatomical data, the idea arose that the brain stem reticular formation is the origin of the ascending reticular activating system (ARAS) that would operate through the intralaminar nuclei and activate widespread regions of the cerebral cortex. This view of the reticular formation has been extensively modified, and nowadays the reticular formation is viewed as a series of highly specific cell groups, which closely surround the individual motor and sensory nuclei of the brain stem (Sects. 5.2 and 5.4). The diffuse system, driving arousal and consciousness, is now attributed to the neuromodulatory system, including the serotonergic raphe nuclei, the locus coeruleus and other noradrenergic or adrenergic cell groups and cholinergic cell groups, all close to the reticular formation (Sects. 5.3 and 5.5). The English terms of the Terminologia Neuroanatomica are used throughout. Although the basic notion of the ARAS concept that structures in the brain stem regulate states of consciousness still holds true, a much more complex picture has emerged. Experimental work in laboratory animals suggests that the following structures play key roles in the maintenance and modulation of wakefulness: cholinergic nuclei in the upper brain stem and basal forebrain; noradrenergic nuclei, in particular the locus coeruleus; a histaminergic projection from the tuberomamillary nucleus in the posterior hypothalamus; and dopaminergic and serotonergic pathways from the ventral tegmental area and raphe nuclei, respectively. These nuclei all participate in an ascending activating system to the cerebral cortex (Sect. 5.5). The hypothalamus also contains orexinergic neurons that are crucial for maintaining normal wakefulness and a sleep-promoting region in the ventrolateral preoptic area. These groups have mutually inhibiting connections, known as the sleep switch (Sect. 5.6). Some sleep disorders in which these structures are involved are discussed in Clinical Cases (Sect. 5.7). Damage to the upper brain stem reticular formation is known to cause the most radical disturbance of consciousness, i.e. coma, as illustrated in several Clinical Cases (Sect. 5.8).