‘Dreaming as delirium’ shows that dreaming and severe mental illness are not only analogous, but identical. It is easy to imagine that physical changes in brain state can produce psychosis, but also that the perfectly normal changes of sleep have very dramatic effects on our mental capacities. Psychosis is, by definition, a mental state characterised by hallucinations and/or delusions and dreaming is most like the organic mental illness delirium. Sleep loss is common in and contributes powerfully to the development of psychosis. The connections between major depression, which is also thought to be enhanced by cholinergic (acetylcholine) systems, mood, and REM sleep are considered.