Impaired rapid eye movement sleep (REMS) is commonly observed in Alzheimer's disease, suggesting injury to mesopontine cholinergic neurons. We sought to determine whether abnormal beta-amyloid peptides impair REMS and injure mesopontine cholinergic neurons in transgenic (hAPP695.SWE) mice (Tg2576) that model brain amyloid pathologies. Tg2576 mice and wild-type littermates were studied at 2, 6, and 12 months by using sleep recordings, contextual fear conditioning, and immunohistochemistry. At 2 months of age, REMS was indistinguishable by genotype but was reduced in Tg2576 mice at 6 and 12 months. Choline acetyltransferase-positive neurons in the pedunculopontine tegmentum of Tg2576 mice at 2 months evidenced activated caspase-3 immunoreactivity, and at 6 and 12 months the numbers of pedunculopontine tegmentum choline acetyltransferase-positive neurons were reduced in the Tg2576 mice. Other cholinergic groups involved in REMS were unperturbed. At 12 months, Tg2576 mice demonstrated increased 3-nitrotyrosine immunoreactivity in cholinergic projection sites but not in cholinergic soma. We have identified a population of selectively compromised cholinergic neurons in young Tg2576 mice that manifest early onset REMS impairment. The differential vulnerability of these cholinergic neurons to Abeta injury provides an invaluable tool with which to understand mechanisms of sleep/wake perturbations in Alzheimer's disease.