Dreaming is a form of imagination, based on embodied simulation. Dreams frequently involve enactments of a dreamer’s personal conceptions and concerns, both positive and negative, in relation to known persons and favorite avocations. More generally, most dreams include social interactions and activities. Dreaming is supported by an unconstrained portion of the default network, including its dorsal medial and temporal lobe functional subsystems, along with a region in the secondary visual cortex and by the caudate nucleus. The fact that this portion of the default network is unconstrained by the frontoparietal and the dorsal attentional control networks gives dreaming its unique character as imagination roaming freely. This neural substrate has cognitive insufficiencies that are consistent with what is known about dreaming and dream content from six decades of systematic research in laboratory and non-laboratory settings, such as a dearth of episodic memories and only rare indications of “symbolic” content. Nevertheless, there are lawful aspects of dreaming, such as the “small-world” nature of its character networks and consistency in dream content over many years.