Urotensin II (UII) is a peptide with structural similarity to the somatostatin family with potent vasoconstrictor activity. UII receptor is expressed broadly in the periphery, and most notably in the heart and microvessels. In the brain, the UII receptor can be detected in the spinal cord and in cholinergic nuclei in the brainstem known to be involved in REM sleep regulation. Recent data suggest that, in addition to their vasoactive properties, UII receptor ligands may have excitatory activity on a selective group of neurons that modulate REM sleep. This review focuses on the implications of these findings for the neurobiology of REM sleep regulation and discusses the possible impact of UII and other neuropeptides on the balance of the alternation between sleep states.