Contingent negative variation (CNV) is a slow surface-negative cortical potential in the human brain that is related to individual differences in psychological functions. Major sources of interindividual variability in CNV development among normal adults, children, and psychiatric patients involve attention and arousal functions. Consequently, a two-process theoretical model is postulated to account for individual differences in CNV, namely, that CNV amplitude is positively and monotonically related to attention functions and nonmonotonically (inverted-U) related to arousal functions. CNV also appears to be reflecting motor processes. Although CNV is a potentially useful tool in psychiatric research, eye movements can drastically alter CNV and are a serious methodological problem requiring further study. The neurophysiological genesis of CNV involves both cortical (apical dendrites in upper layers of frontal cortex) and subcortical (brain stem reticular formation) mechanisms.