Multiple populations of wake-promoting neurons have been characterized in mammals, but few sleep-promoting neurons have been identified(1). Wake-promoting cell types include hypocretin and GABA (gamma-aminobutyric-acid)-releasing neurons of the lateral hypothalamus, which promote the transition to wakefulness from non-rapid eye movement (NREM) and rapid eye movement (REM) sleep(2,3). Here we show that a subset of GABAergic neurons in the mouse ventral zona incerta, which express the LIM homeodomain factor Lhx6 and are activated by sleep pressure, both directly inhibit wake-active hypocretin and GABAergic cells in the lateral hypothalamus and receive inputs from multiple sleep-wake-regulating neurons. Conditional deletion of Lhx6 from the developing diencephalon leads to decreases in both NREM and REM sleep. Furthermore, selective activation and inhibition of Lhx6-positive neurons in the ventral zona incerta bidirectionally regulate sleep time in adult mice, in part through hypocretin-dependent mechanisms. These studies identify a GABAergic subpopulation of neurons in the ventral zona incerta that promote sleep.