Stress is considered to be an important cause of disrupted sleep and insomnia. However, controlled and experimental studies in rodents indicate that effects of stress on sleep-wake regulation are complex and may strongly depend on the nature of the stressor. While most stressors are associated with at least a brief period of arousal and wakefulness, the subsequent amount and architecture of recovery sleep can vary dramatically across conditions even though classical markers of acute stress such as corticosterone are virtually the same. Sleep after stress appears to be highly influenced by situational variables including whether the stressor was controllable and/or predictable, whether the individual had the possibility to learn and adapt, and by the relative resilience and vulnerability of the individual experiencing stress. There are multiple brain regions and neurochemical systems linking stress and sleep, and the specific balance and interactions between these systems may ultimately determine the alterations in sleep-wake architecture. Factors that appear to play an important role in stress-induced wakefulness and sleep changes include various monominergic neurotransmitters, hypocretins, corticotropin releasing factor, and prolactin. In addition to the brain regions directly involved in stress responses such as the hypothalamus, the locus coeruleus, and the amygdala, differential effects of stressor controllability on behavior and sleep may be mediated by the medial prefrontal cortex. These various brain regions interact and influence each other and in turn affect the activity of sleep-wake controlling centers in the brain. Also, these regions likely play significant roles in memory processes and participate in the way stressful memories may affect arousal and sleep. Finally, stress-induced changes in sleep-architecture may affect sleep-related neuronal plasticity processes and thereby contribute to cognitive dysfunction and psychiatric disorders.