Sleep and wake are opposing behavioral states controlled by the activity of specific neurons. The neurons responsible for sleep/wake control have not been fully identifed due to the lack of in-vivo high throughput technology. We use the deep-brain calcium (Ca2+) imaging method to identify activity of hypothalamic neurons expressing the vesicular GABA transporter (vGAT), a marker of GABAergic neurons. vGAT-cre mice (n=5) were microinjected with rAAV-FLEX-GCaMP6M into the lateral hypothalamus and 21d later the Ca2+ influx in vGAT neurons (n=372) was recorded in freely-behaving mice during waking (W), NREM and REM sleep. Post-mortem analysis revealed the lens tip located in the zona incerta/lateral hypothalamus (ZI-LH) and the change in fluorescence of neurons in the field of view was as follows: 54.9% of the vGAT neurons had peak fluorescence during REM sleep (REM-max), 17.2% were NREM-max, 22.8% were wake-max while 5.1% were both wake+REM max. Thus, three quarters of the recorded vGAT neurons in the ZI-LH were most active during sleep. In the NREM-max group Ca2+ fluorescence anticipated the initiation of NREM sleep onset and remained high throughout sleep (NREM and REM sleep). In the REM-max neurons Ca2+fluorescence increased before the onset of REM sleep and stayed elevated during the episode. Activation of the vGAT NREM-max neurons in the zona incerta and dorsal lateral hypothalamus would inhibit the arousal neurons to initiate and maintain sleep.