Objective: Transitions from wake to sleep are accompanied by significant alterations of impulse patterns and synchronization in thalamocortical circuits and distinct activity changes in diverse hypothalamic nuclei. The question is whether and how these alterations can be related to the generally accepted concept of sleep regulation which postulates the interaction between a circadian and a homeostatic process. Methods: We have used a computational model with Hodgkin-Huxley-type neurons and physiology-based synapses for the mathematical realization of a new concept of hypocretin/orexin-based control of sleep homeostasis which is driven by a circadian pacemaker input and connected to a model of thalamic synchronization. Results: The simulation results suggest that 1) high frequent impulse activity of hypocretin/orexin neurons during wakefulness is sustained by reciprocal excitatory connections; 2) transition to a silent state (sleep) results from activity dependent weakening of the synaptic efficacy of hypocretin/orexin; 3) sustained activity can be reinstalled by the circadian pacemaker when the synaptic efficacy has sufficiently recovered; 4) depending on the input from the hypocretin/orexin neurons the thalamic neurons undergo transitions between asynchronous tonic firing activity during wakefulness and synchronized busting discharges during sleep. Conclusions: In combination with a circadian input, the model mimics the transitions between silent and firing states of hypothalamic neurons as well as thalamic transitions between asynchronous tonic firing and synchronized bursting in full agreement with sleep-wake cycles. Acknowledgement: The work was supported by the European Union through the Network of Excellence BioSim contract No LSHB-CT-2004-005137.