The role of the medial basal hypothalamus (MBH) and the anterior hypothalamus/preoptic area (AH/POA) in sleep regulation was investigated using the Halász knife technique to sever MBH anterior and lateral projections in rats. If both lateral and anterior connections of the MBH were cut, rats spent less time in non-rapid eye movement sleep (NREMS) and rapid eye movement sleep (REMS). In contrast, if the lateral connections remained intact, the duration of NREMS and REMS was normal. The diurnal rhythm of NREMS and REMS was altered in all groups except the sham control group. Changes in NREMS or REMS duration were not detected in a group with pituitary stalk lesions. Water consumption was enhanced in three groups of rats, possibly due to the lesion of vasopressin fibers entering the pituitary. EEG delta power during NREMS and brain temperatures (Tbr) were not affected by the cuts during baseline or after sleep deprivation. In response to 4 h of sleep deprivation, only one group, that with the most anterior-to-posterior cuts, failed to increase its NREMS or REMS time during the recovery sleep. After deprivation, Tbr returned to baseline in most of the treatment groups. Collectively, results indicate that the lateral projections of the MBH are important determinants of duration of NREMS and REMS, while more anterior projections are concerned with the diurnal distribution of sleep. Further, the MBH projections involved in sleep regulation are distinct from those involved in EEG delta activity, water intake, and brain temperature.