Theories on the function of REM sleep and dreaming, with which it has a contingent relationship, remain diverse. They include facilitation of memory storage, reverse learning, anatomical and functional brain maturation, catecholamine restoration, psychoanalytical (wish fulfilment or otherwise). It is possible that one function is grafted onto another as the personality develops. Given a close relationship between REM sleep and dreaming, and given that the neonate spends 18 hours asleep per day, of which 12 hours are spent in REM sleep, it is logical to look in the neonate for a primary function of dreaming. The two constants in the dreaming process are: 1) the dreamer is always present as first person observer; 2) there is always a topographical setting. Based on the foregoing, it is proposed that a major function of REM sleep is the development and maintenance of a sense of personal identity, through creating a 'being there' environment at regular intervals during prolonged periods of absence from a waking state in topographical surrounds. The infant cannot forget who he/she is. Thus, he/she develops a clear sense of his/her own identity, or the 'I'ness of me', and a sense of his/her separateness from the topographical world. At the same time, by largely forgetting the dreams, he/she is not burdened by the need for an elaborate method of storage of the vicarious and bizarre experiences.