High dream recallers (HR) show a larger brain reactivity to auditory stimuli during wakefulness and sleep as compared to low dream recallers (LR) and also more intra-sleep wakefulness (ISW), but no other modification of the sleep macrostructure. To further understand the possible causal link between brain responses, ISW and dream recall, we investigated the sleep microstructure of HR and LR, and tested whether the amplitude of auditory evoked potentials (AEPs) was predictive of arousing reactions during sleep. Participants (18 HR, 18 LR) were presented with sounds during a whole night of sleep in the lab and polysomnographic data were recorded. Sleep microstructure (arousals, rapid eye movements (REMs), muscle twitches (MTs), spindles, KCs) was assessed using visual, semi-automatic and automatic validated methods. AEPs to arousing (awakenings or arousals) and non-arousing stimuli were subsequently computed. No between-group difference in the microstructure of sleep was found. In N2 sleep, auditory arousing stimuli elicited a larger parieto-occipital positivity and an increased late frontal negativity as compared to non-arousing stimuli. As compared to LR, HR showed more arousing stimuli and more long awakenings, regardless of the sleep stage but did not show more numerous or longer arousals. These results suggest that the amplitude of the brain response to stimuli during sleep determine subsequent awakening and that awakening duration (and not arousal) is the critical parameter for dream recall. Notably, our results led us to propose that the minimum necessary duration of an awakening during sleep for a successful encoding of dreams into long-term memory is approximately 2 min.