Background Halothane anesthesia causes spindles in the electroencephalogram (EEG), but the cellular and molecular mechanisms generating these spindles remain incompletely understood. The current study tested the hypothesis that halothane-induced EEG spindles are regulated, in part, by pontine cholinergic mechanisms. Methods Adult male cats were implanted with EEG electrodes and trained to sleep in the laboratory. Approximately 1 month after surgery, animals were anesthetized with halothane and a microdialysis probe was stereotaxically placed in the medial pontine reticular formation (mPRF). Simultaneous measurements were made of mPRF acetylcholine release and number of cortical EEG spindles during halothane anesthesia and subsequent wakefulness. In additional experiments, carbachol (88 mM) ws microinjected in the the mPRF before halothane anesthesia to determine whether enhanced cholinergic neurotransmission in the MPRF would block the ability of halothane to induce cortical EEG spindles. Results During wakefulness, mPRF acetylcholine release averaged 0.43 pmol/10 min of dialysis. Halothane at 1 minimum alveolar concentration decreased acetylcholine release (0.25 pmol/10 min) while significantly increasing the number of cortical EEG spindles. Cortical EEG spindles caused by 1 minimum alveolar concentration halothane were not significantly different in waveform, amplitude, or number from the EEG spindles of nonrapid eye movement sleep. Microinjection of carbachol into the mPRF before halothane administration caused a significant reduction in number of halothane-induced EEG spindles. Conclusions Laterodorsal and pedunculopontine tegmental neurons, which provide cholinergic input to the mPRF, play a causal role in generating the EEG spindles of halothane anesthesia.