Sleep deprivation induces a characteristic rebound in NREM sleep accompanied by an immediate increase in the power of delta (0.5 -4 Hz) oscillations, proportional to the prior time awake. To test the idea that galanin neurons in the mouse lateral preoptic hypothalamus (LPO) regulate this sleep homeostasis, they were selectively genetically ablated. The baseline sleep architecture of LPO-DGal mice became heavily fragmented, their average core body temperature permanently increased (by about 2°C) and the diurnal variations in body temperature across the sleep-wake cycle also markedly increased. Additionally, LPO-DGal mice showed a striking spike in body temperature and increase in wakefulness at a time (ZT24) when control mice were experiencing the opposite -a decrease in body temperature and becoming maximally sleepy (start of "lights on"). After sleep deprivation sleep homeostasis was largely abolished in LPO-DGal mice: the characteristic increase in the delta power of NREM sleep following sleep deprivation was absent, suggesting that LPO galanin neurons track the time spent awake. Moreover, the amount of recovery sleep was substantially reduced over the following hours. We also found that the a2 adrenergic agonist dexmedetomidine, used for long-term sedation during intensive care, requires LPO galanin neurons to induce both the NREM-like state with increased delta power and the reduction in body temperature, characteristic features of this drug. This suggests that dexmedetomidine over-activates the natural sleep homeostasis pathway via galanin neurons. Collectively, the results emphasize that NREM sleep and the concurrent reduction in body temperature are entwined at the circuit level. 3 Significance Catching up on lost sleep (sleep homeostasis) is a common phenomenon in mammals, but there is no circuit explanation for how this occurs. We have discovered that galanin neurons in the hypothalamus are essential for sleep homeostasis as well as for the control of body temperature. This is the first time that a neuronal cell type has been identified that underlies sleep homeostasis. Moreover, we show that activation of these galanin neurons are also essential for the actions of the a2 adrenergic agonist dexmedetomidine, which induces both hypothermia together with powerful delta oscillations resembling NREM sleep. Thus, sleep homeostasis, temperature control and sedation by a2 adrenergic agonists can all be linked at the circuit level by hypothalamic galanin neurons.