Regulation of the sleep-waking cycle is complex and involves diverse brain circuits and molecules. On one hand, an interplay among many neuroanatomical and neurochemical systems including acetylcholine, dopamine, noradrenaline, serotonin, histamine, and hypocretin has been shown to control the waking state. On the other hand the sleep-onset is governed by the activity of sleep-promoting neurons placed in the anterior hypothalamus that utilize GABA to inhibit wake-promoting regions. Moreover, brainstem regions inhibited during wakefulness (W) and slow wave sleeps (SWS) become active during rapid eye movement (REM) sleep. Further complexity has been introduced by the recognition of sleep-promoting molecules that accumulate in the brain in prolonged W as well as the physiological role of gene expression during sleep. The sleep-wake cycle is currently undergoing intense research with many new findings leading to new paradigms concerning sleep regulation, brain organization and sleep function. This review provides a broader understanding of our present knowledge in the field of sleep research.