Rapid eye movement (REM) phasic activity refers to brief events that occur in periods of REM sleep, such as individual eye movements (EMs). REM density (RD) is the best-known measure of such activity, although reports of RD differences among normal, depressed, and schizophrenic subjects have been equivocal. RD is a measure with a large variability, and its physiological substrate is not known. We sought a more consistent measure which might also suggest the underlying physiology. Using the time intervals between individual EMs, we calculated empirical probability distributions which showed that EMs fell into two subgroups or states: "burst" and "isolated." Then, a novel Markov chain model of sequential transition between the states was calculated for nine normal, eight schizophrenic, and seven depressed male veterans. A significantly higher probability of remaining in the burst state was observed in both patient groups. The actual number of EMs in the isolated state was nearly identical in the three groups. Possible pontine neurochemical explanations involving cholinergic and serotonergic mechanisms are discussed.