Recently, we proposed that the coupling of cognitive activation and diminished arousal during REM sleep may have a mood regulating effect. Conversely, increased arousal during REM sleep may be associated with mood dysregulation. In this paper, the desensitization model is described, and data are presented on the association between motor activity during REM sleep, wakefulness and severity of depression. Motor activity sleep EEG data and two measures of depressive severity (BDI and HRSD) were obtained from 23 depressed patients. BDI scores were significantly correlated with motor activity only during REM sleep. HRSD scores were correlated with motor activity only during quiet wakefulness. These findings are consistent with the theoretical perspective that dysregulation in arousal mechanisms during REM sleep may promote mood disturbance during the depressive episode.