The periaqueductal gray (PAG) in the midbrain is known to coordinate behavioral and autonomic responses to threat and injury through its descending projections to the brainstem. Here, we show that neurotensin (NTS)-expressing glutamatergic neurons in the ventrolateral PAG (vlPAG) powerfully promote non-rapid eye movement (NREM) sleep partly through their projection to the caudal medulla. Optogenetic and chemogenetic activation of vlPAG NTS neurons strongly enhanced NREM sleep, whereas their inactivation increased wakefulness. Calcium imaging and optrode recording showed that they are preferentially active during NREM sleep. The NREM-promoting effect of vlPAG NTS neurons is partly mediated by their projection to the caudal ventromedial medulla, where they excite GABAergic neurons. Bidirectional optogenetic and chemogenetic manipulations showed that the medullary GABAergic neurons also promote NREM sleep, and they innervate multiple monoaminergic populations. Together, these findings reveal a novel pathway for NREM sleep generation, in which glutamatergic neurons drive broad GABAergic inhibition of wake-promoting neuronal populations.