Our recent report demonstrated that a small subset of GABAergic interneurons in the cerebral cortex of rodents expresses Fos protein, a marker for neuronal activity, during slow wave sleep (Gerashchenko et al., 2008). The population of sleep-active neurons consists of strongly immunohistochemically-stained cells for the enzyme neuronal nitric oxide synthase. By virtue of their widespread localization within the cerebral cortex and their widespread projections to other cortical cell types, cortical neuronal nitric oxide synthase-positive neurons are positioned to play a central role in the local regulation of sleep waveforms within the cerebral cortex. Here, we review the possible functions of neuronal nitric oxide synthase and its diffusible gas product, nitric oxide, in regulating neuronal activity, synaptic plasticity and cerebral blood flow within the context of local sleep regulation in the cerebral cortex. We also summarize what is known, in addition to their expression of neuronal nitric oxide synthase, about the biochemical phenotype, synaptic connectivity and electrophysiological properties of this novel sleep-active population of cells. Finally, we raise some critical unanswered questions about the role of this population in local sleep regulation within the cerebral cortex and describe some experimental approaches that might be used to address those questions.