The hypocretins (Hcrts), also known as orexins, are two neuropeptides produced exclusively in the lateral hypothalamus. They act on two specific receptors that are widely distributed across the brain and involved in a myriad of neurophysiological functions that include sleep, arousal, feeding, reward, fear, anxiety and cognition. Hcrt cell loss in humans leads to narcolepsy with cataplexy (narcolepsy type 1), a disorder characterized by intrusions of sleep into wakefulness, demonstrating that the Hcrt system is nonredundant and essential for sleep/wake stability. The causal link between Hcrts and arousal/wakefulness stabilisation has led to the development of a new class of drugs, Hcrt receptor antagonists to treat insomnia, based on the assumption that blocking orexin‐induced arousal will facilitate sleep. This has been clinically validated: currently, two Hcrt receptor antagonists are approved to treat insomnia (suvorexant and lemborexant), with a New Drug Application recently submitted to the US Food and Drug Administration for a third drug (daridorexant). Other therapeutic applications under investigation include reduction of cravings in substance‐use disorders and prevention of neurodegenerative disorders such as Alzheimer's disease, given the apparent bidirectional relationship between poor sleep and worsening of the disease. Circuit neuroscience findings suggest that the Hcrt system is a hub that integrates diverse inputs modulating arousal (e.g., circadian rhythms, metabolic status, positive and negative emotions) and conveys this information to multiple output regions. This neuronal architecture explains the wealth of physiological functions associated with Hcrts and highlights the potential of the Hcrt system as a therapeutic target for a number of disorders. We discuss present and future possible applications of drugs targeting the Hcrt system for the treatment of circuit‐related neuropsychiatric and neurodegenerative conditions.