The fundamental purpose of sleep remains one of the most compelling questions yet to be answered in the area of neuroscience, if not all of biology. A pervasive behavior among members of the animal kingdom, the functional necessity of engaging regularly in sleep is best demonstrated by showing that failing to do so leads to a broad repertoire of pathological outcomes including cognitive, immunological, hormonal, and metabolic outcomes, among others. Indeed, an absolute requirement for sleep has been shown in studies that have demonstrated that continuous total deprivation of sleep for as short a period as 15 days is generally lethal in some species. The most common clinical sleep disorder, insomnia, is both a principal disease (primary insomnia) as well as a co-morbidity of a large number of other ostensibly unrelated diseases including chronic pain, attention deficit hyperactivity disorder, and depression. From a treatment perspective, restoring normal healthy sleep delivers subsequent benefits in waking cognitive function and mood with the potential for beneficial therapeutic impact on daily functioning across multiple diseases for which restorative healthy sleep is compromised. Our remarkable escalation in understanding the anatomy and physiology of sleep/wake control mechanisms provides new opportunities to modify the neurobiology of sleep and wake-related behaviors in novel and exciting ways. In parallel, expansion of sleep research into novel interfaces between sleep-wake biology and disease states is revealing additional extensive implications of lost sleep. Current investigational and conventional pharmacological approaches for the treatment of sleep and wake disorders are discussed based on their mechanism of action within the CNS and their effect on sleep and wake. This review of recent sleep biology and sleep pharmacology peers into the future of sleep therapeutics to highlight both mechanistic safety and functional outcomes as key for differentiating and establishing success for the next generation of arousal modifying therapeutics.