Objectives To examine whether disrupted regulation of REM sleep propensity is implicated in nightmare (NM) pathophysiology. Background Heightened REM propensity induced by REM sleep deprivation is belied by increases in REM %, REM density and the dreamlike quality of dream mentation during post-deprivation recovery sleep. Compromised regulation of REM sleep propensity may be a contributing factor in the pathophysiology of frequent NMs. Methods A preliminary study of 14 subjects with frequent NMs (⩾1NM/week; 27.6±9.9years) and 11 healthy control subjects (<1NM/month; 24.3±5.3years) was undertaken. Subjects completed home sleep/dream logs and underwent three nights of polysomnographic recording with REM sleep deprivation on night 2. Group differences were assessed for a battery of REM sleep and dream measures on nights 1 and 3. Results Several measures, including #skipped early-night REM periods, REM latency, REM/NREM cycle length, early/late REM density, REM rebound, late-night REM% and dream vividness, suggested that REM sleep propensity was abnormally low for the frequent NM group throughout the 3-day study. Conclusions Findings raise the possibility that REM anomalies recorded from NM sufferers sleeping in the laboratory environment reflect a disruption of one or more endogenous regulators of REM sleep propensity.