Cortical network activity correlates with vigilance state: Deep sleep is characterized by slow, synchronized oscillations, whereas desynchronized, stochastic discharge is typical of the waking state. Neuropeptides, such as orexin and substance P but also neurotensin (NT), promote arousal. Relatively little is known about if NT can directly affect the cortical network, and if so, through which mechanisms and cellular targets. Here, we addressed these issues using rat in vitro cortex preparations. Following NT application specifically to deeper layers, slow oscillation activity was attenuated with a significant reduction in UP state frequency. The cortical response to thalamic stimulation exhibited enhanced temporal precision in the presence of NT, consistent with the transition in vivo from sleep to wakefulness. These changes were associated with a relative shift toward inhibition in the excitation/inhibition balance. Whole-cell recordings from layer 6 revealed presynaptically driven NT-induced inhibition of pyramidal neurons and excitation of fast-spiking interneurons. Deeper in the cortex, neurons within the white matter (WM) were strongly depolarized by NT application. The colocalization of NT and tyrosine hydroxylase immunoreactivities in deep layer fibers throughout the cortical mantle indicates mediation via dopaminergic systems. These data suggest a cortical mechanism for NT-induced wakefulness and support a role for WM neurons in state control.