Hypocretins/orexins are rapidly emerging as functionally important neurotransmitters. Two related neuropeptides (Hcrt-1/OXA, Hcrt-2/OXB) encoded by the same precursor gene and two G-protein coupled receptors (Hcrtr1/OXR1, Hcrtr2/OXR2) are currently known. Hypocretin-containing cells are discretely localized within the perifornical hypothalamus but have widespread projections, with generally excitatory postsynaptic effects. Dense excitatory projections to all monoaminergic cell groups have been reported. A major emerging function for this system is likely to be the regulation of sleep. Alterations in hypocretin neurotransmission causes the sleep disorder narcolepsy in mice, dogs and humans. Effects on appetite, neuroendocrine and energy metabolism regulation are also suggested by other studies. Hypocretins are uniquely positioned to link sleep, appetite and neuroendocrine control, three behaviors of major importance in psychiatry. The potential role of this system in regulating the sleep cycle, modulating wakefulness at selected circadian times and in mediating the deleterious effects of sleep deprivation is discussed.