Sleep is an essential component of animal behavior, controlled by both circadian and homeostatic processes. Typical brain oscillations for sleep and wake states are distinctive and reflect recurrent activity amongst neural circuits spanning localized to global brain regions. Since the original discovery of hypothalamic centers controlling both sleep and wakefulness, current views now implicate networks of neuronal and non-neuronal cells distributed brain-wide. Yet the mechanisms of sleep-wake control remain unclear. In light of recent studies, here we review experimental evidence from lesional, correlational, pharmacological and genetics studies, which support a role for the thalamus in several aspects of sleep-wake states. How these thalamo-cortical network mechanisms contribute to other executive functions such as memory consolidation and cognition, remains an open question with direct implications for neuro-psychiatric diseases and stands as a future challenge for basic science and healthcare research.