Sleep and arousal are among the major mysteries remaining in biology. Animals are rendered defenseless, unable to forage for food, and immobile during sleep and yet sleep is necessary since complete deprivation results in significant health deficits and eventually death. In humans, artificial lighting and societal pressures have reduced the total amount of time spent sleeping over the last century. Chapter 1 of this thesis provides background information on our current understandings of sleep, the role of sleep in disease and Drosophila as a model organism for the study of sleep. Chapter 2 describes the RNA editing enzyme, ADAR, as a novel regulator of sleep and glutamatergic plasticity in Drosophila whereby ADAR acts to restrict the size of the synaptic vesicle reserve pool in glutamatergic sleep-promoting neurons. Chapter 3 details a novel arousal threshold measuring apparatus that expands our ability to measure and understand sleep and arousal in Drosophila. Chapter 4 presents a study in which we show multiple neurotransmitter systems promoting arousal yet differentially promote sleep homeostasis and the cognitive consequences of homeostatic recovery sleep. Chapter 5 describes work probing the role of the gene Nf1 as a sleep-promoting factor and its localization. Finally, Chapter 6 presents an extension of studies performed on the previously described sleep-promoting gene sss and its bifunctional role in regulating neuronal excitability and cholinergic synaptic transmission.