Penile erections during rapid eye movement (REM) sleep are a robust physiologic phenomenon in all normal healthy males, irrespective of age. Given the involuntary nature of erections in sleep, sleep-related erection (SRE) testing has been used to differentiate psychogenic from organic impotence. The historical background of nocturnal penile tumescence, its current use, and common misconceptions of SRE testing are discussed. An animal model has been developed to study SRE mechanisms and has provided a new neural model regarding REM-related erectile control. The implications of these recent data on clinical SRE evaluation are presented. Finally, guidelines regarding SRE testing with polysomnography have not been available, contributing to a decline in formal SRE testing even though erections in sleep are commonly evaluated by urologists using home screening devices that do not record sleep. We propose a set of clinical indications when formal SRE evaluation in a sleep laboratory should be considered.