The hypocretins/orexins (hcrts) are two recently described neuropeptides derived from the same precursor and expressed in a few thousand neurons in the perifornical area of the lateral hypothalamus, which project throughout the brain. The hypocretins bind to two G-protein coupled receptors with different selective affinities. Positional cloning of the gene responsible for a canine model of narcolepsy revealed that this disease is caused by mutations in hypocretin receptor type 2. Parallel studies with hypocretin/orexin knockout mice showed behavioral arrests reminiscent of narcolepsy-like attacks. Narcoleptic patients have decreased hypocretin-containing neurons suggesting that narcolepsy in humans is caused by selective neurodegeneration of hypocretinergic neurons. Additional functions for the hypocretins on regulation of energy balance neuroendocrine release and sympathetic outflow have been described. Here we review studies in humans and mutant animals that have provided clues about the functions of the hypocretinergic system, which appear to involve the coherent regulation of networks that dictate the states of arousal.