Melatonin promotes sleep. However, the underlying mechanisms are unknown. Orexin neurons in the perifornical lateral hypothalamus (PFH) are pivotal for wake promotion. Does melatonin promote sleep by inhibiting orexin neurons? We used C57BL/6J mice and designed 4 experiments to address this question. Experiment 1 used double-labeled immunofluorescence and examined the presence of melatonin receptors on orexin neurons. Second, mice, implanted with bilateral guides targeted toward PFH and sleep-recording electrodes, were infused with melatonin (500 pmole/50 nL/side) at dark onset (onset of active period), and spontaneous bouts of sleep-wakefulness were examined. Third, mice, implanted with bilateral guides into the PFH, were infused with melatonin (500 pmole/50 nL/side) at dark onset and euthanized 2 hours later, to examine the activation of orexin neurons using c-Fos expression in orexin neurons. Fourth, mice, implanted with PFH bilateral guides and sleep-recording electrodes, were infused with melatonin receptor antagonist, luzindole (10 pmol/50 nL/side), at light onset (onset of sleep period), and spontaneous bouts of sleep-wakefulness were examined. Our results suggest that orexin neurons express MT1, but not MT2 receptors. Melatonin infusion into the PFH, at dark onset, site-specifically and significantly increased NREM sleep (43.7%, P = .003) and reduced wakefulness (12.3%, P = .013). Local melatonin infusion at dark onset inhibited orexin neurons as evident by a significant reduction (66%, P = .0004) in the number of orexin neurons expressing c-Fos. Finally, luzindole infusion-induced blockade of melatonin receptors in PFH at sleep onset significantly increased wakefulness (44.1%, P = .015). Based on these results, we suggest that melatonin may act via the MT1 receptors to inhibit orexin neurons and promote sleep.