Hypoxia is commonly invoked to explain alterations in mental function, particularly in patients with cardiac pulmonary failure. The effects of acute graded hypoxia or higher integrative functions are well documented experimentally in man. Hypoxia in experimental animal models demonstrates that the pathophysiology is complex. In mild to moderate hypoxia, in contrast to severe hypoxia and to ischemia, the supply of energy for the brain is not impaired; cerebral levels of adenosine triphosphate (ATP) and adenylate energy charge are normal. In contrast, the turnover of several neurotransmitters is altered by mild hypoxia. For example, acetylcholine synthesis is reduced proportionally to the reduction in carbohydrate oxidation. This relationship holds in vitro and with several in vivo models of hypoxia. Pharmacologic and physiologic studies in man and experimental animals are consistent with acetylcholine having an important role in mediating the cerebral effects of mild hypoxia. These observations raise the possibility that treatments directed to cholinergic or other central neurotransmitter systems may benefit patients with cerebral syndromes secondary to chronic hypoxia.