(1) Background: Gamma-aminobutyric acid (GABA) is an amino acid and the primary inhibitory neurotransmitter in the brain. GABA has been shown to reduce stress and promote sleep. GABALAGEN (GBL) is the product of fermented fish collagen by Lactobacillus brevis BJ20 and Lactobacillus plantarum BJ21, naturally enriched with GABA through the fermentation process and characterized by low molecular weight. (2) Methods: The present study evaluated the GABAAing affinity of GBL through receptor binding assay. The sedative effects of GBL were investigated through electroencephalography (EEG) analysis in an animal model of electro foot shock (EFS) stress-induced sleep disorder, and then we examined the expression of orexin and the GABAA receptor in the brain region using immunohistochemistry and an enzyme-linked immunosorbent assay (ELISA). (3) Results: We found that on the binding assay, GBL displayed high affinity to the GABAA receptor. Also, after treatment with GBL, the percentage of the total time in rapid eye movement (REM) and non-rapid eye movement (NREM) sleep was significantly and dose-dependently increased in EFS-induced rats. Consistent with behavioral results, the GBL-treated groups showed that the expression of GABAA receptor immune-positive cells in the VLPO was markedly and dose-dependently increased. Also, the GBL-treated groups showed that the expression of the orexin-A level in LH was significantly decreased. (4) Conclusions: GBL showed efficacy and potential to be used as an anti-stress therapy to treat sleep deprivation through the stimulation of GABAA receptors and the consequent inhibition of orexin activity.