AbstractThe discovery that hypocretins are involved in narcolepsy, a disorder associated with excessive daytime sleepiness, cataplexy and unusually rapid transitions to rapid‐eye‐movement sleep, opens a new field of investigation in the area of sleep control physiology. Hypocretin‐1 and ‐2 (also called orexin‐A and ‐B) are newly discovered neuropeptides processed from a common precursor, preprohypocretin. Hypocretin‐containing cells are located exclusively in the lateral hypothalamus, with widespread projections to the entire neuroaxis. Two known receptors, Hcrtr1 and Hcrtr2, have been reported. The functional significance of the hypocretin system is rapidly emerging in both animals and humans. Hypocretin abnormalities cause narcolepsy in dogs, human and mice. The role of the hypocretin system in normal sleep regulation is more uncertain. We believe hypocretin cells drive cholinergic and monoaminergic activity across the sleep cycle. Input from the suprachiasmatic nucleus to hypocretin‐containing neurons may explain the occurrence of clock‐dependent alertness. Other functions are suggested by pharmacological and neurochemical experiments. These include regulation of food intake, neuroendocrine function, autonomic nervous system activity and energy balance. BioEssays 23:397–408, 2001. © 2001 John Wiley & Sons, Inc.