Respiration in vertebrates is generated by a compact network which is located in the lower brainstem but cellular mechanisms which underlie persistent oscillatory activity of the respiratory network are yet unknown. Using two-photon imaging and patch-clamp recordings in functional brainstem preparations of mice containing pre-Bötzinger complex (preBötC), we examined the actions of metabotropic glutamate receptors (mGluR1/5) on the respiratory patterns. The agonist DHPG potentiated and antagonist LY367385 depressed respiration-related activities. In the inspiratory neurons, we observed rhythmic activation of non-selective channels which had a conductance of 24 pS. Their activity was enhanced with membrane depolarization and after elevation of calcium from the cytoplasmic side of the membrane. They were activated by a non-hydrolysable PIP(2) analogue and blocked by flufenamate, ATP4- and Gd3+. All these properties correspond well to those of TRPM4 channels. Calcium imaging of functional slices revealed rhythmic transients in small clusters of neurons present in a network. Calcium transients in the soma were preceded by the waves in dendrites which were dependent on mGluR activation. Initiation and propagation of waves required calcium influx and calcium release from internal stores. Calcium waves activated TPRM4-like channels in the soma and promoted generation of inspiratory bursts. Simulations of activity of neurons communicated via dendritic calcium waves showed emerging activity within neuronal clusters and its synchronization between the clusters. The experimental and theoretical data provide a subcellular basis for a recently proposed group-pacemaker hypothesis and describe a novel mechanism of rhythm generation in neuronal networks.