The basal forebrain (BF) is a key structure in regulating both cortical activity and sleep homeostasis. It receives input from all ascending arousal systems and is particularly highly innervated by histaminergic neurons. Previous studies clearly point to a role for histamine as a wake-promoting substance in the BF. We used in vivo microdialysis and pharmacological treatments in rats to study which electroencephalogram (EEG) spectral properties are associated with histamine-induced wakefulness and whether this wakefulness is followed by increased sleep and increased EEG delta power during sleep. We also investigated which BF neurons mediate histamine-induced cortical activation. Extracellular BF histamine levels rose immediately and remained constant throughout a 6 h period of sleep deprivation, returning to baseline levels immediately afterward. During the spontaneous sleep-wake cycle, we observed a strong correlation between wakefulness and extracellular histamine concentrations in the BF, which was unaffected by the time of day. The perfusion of histamine into the BF increased wakefulness and cortical activity without inducing recovery sleep. The perfusion of a histamine receptor 1 antagonist into the BF decreased both wakefulness and cortical activity. Lesioning the BF cholinergic neurons abolished these effects. Together, these results show that activation of the cholinergic BF by histamine is important in sustaining a high level of cortical activation, and that a lack of activation of the cholinergic BF by histamine may be important in initiating and maintaining nonrapid eye movement sleep. The level of histamine release is tightly connected to behavioral state, but conveys no information about sleep pressure.