Sleep is an essential process conserved from flies to humans. The importance of sleep is underscored by its tight homeostatic control. Through a forward genetic screen, we identified a gene, sleepless, required for sleep in Drosophila. The sleepless gene encodes a brain-enriched, glycosylphosphatidylinositol-anchored protein. Loss of SLEEPLESS protein caused an extreme (>80%) reduction in sleep; a moderate reduction in SLEEPLESS had minimal effects on baseline sleep but markedly reduced the amount of recovery sleep after sleep deprivation. Genetic and molecular analyses revealed that quiver, a mutation that impairs Shaker-dependent potassium current, is an allele of sleepless. Consistent with this finding, Shaker protein levels were reduced in sleepless mutants. We propose that SLEEPLESS is a signaling molecule that connects sleep drive to lowered membrane excitability.