Drosophila exhibits a circadian rest-activity cycle, but it is not known whether fly rest constitutes sleep or is mere inactivity. It is shown here that, like mammalian sleep, rest in Drosophila is characterized by an increased arousal threshold and is homeostatically regulated independently of the circadian clock. As in mammals, rest is abundant in young flies, is reduced in older flies, and is modulated by stimulants and hypnotics. Several molecular markers modulated by sleep and waking in mammals are modulated by rest and activity in Drosophila, including cytochrome oxidase C, the endoplasmic reticulum chaperone protein BiP, and enzymes implicated in the catabolism of monoamines. Flies lacking one such enzyme, arylalkylamine N-acetyltransferase, show increased rest after rest deprivation. These results implicate the catabolism of monoamines in the regulation of sleep and waking in the fly and suggest that Drosophila may serve as a model system for the genetic dissection of sleep.