Insomnia, which is severe enough to warrant treatment, occurs in approximately 10% of the general population. It is associated with a range of adverse consequences for human health, economic productivity and quality of life. In animal and human studies, administration of melatonin has been reported to promote sleep, although there has been controversy regarding its effectiveness. The present study used a chronically implanted radiotelemetry transmitter to record electroencephalogram (EEG) and electromyogram (EMG) to enable discrimination of wake (W), nonrapid eye movement (NREM) sleep and rapid eye movement (REM) sleep in un-restrained rats. The acute action of melatonin and ramelteon, a melatonin agonist recently approved for long-term treatment of insomnia in the USA, was examined. Radioligand binding assays on recombinant human MT(1)/MT(2) receptors showed that both the melatonin and ramelteon were both high affinity, nonsubtype selective ligands. Both compounds acted as potent full agonists on a cellular model of melatonin action, the pigment aggregation response in Xenopus laevis melanophores. Both melatonin and ramelteon (10 mg/kg, i/p), administered close to the mid-point of the dark phase of the L:D cycle, significantly reduced NREM sleep latency (time from injection to the appearance of NREM sleep). Both the drugs also produced a short-lasting increase in NREM sleep duration, but the NREM power spectrum was unaltered. Neither drug altered REM latency, REM sleep duration nor power spectrum during REM sleep. In conclusion, ramelteon administration, like melatonin, exerted an acute, short-lasting sleep-promoting effect in the rat, the model most commonly used to evaluate the activity of novel hypnotic drugs.