The relationship between sleep and epilepsy is closely related to the basic mechanisms underlying the sleep-wake continuum. The endogenous circadian system is an important modulator of the sleep-wake rhythm. The variations of sleep propensity over time are not only an effect of the biological clock but are also influenced by the subject's prior sleep-wake history. The two main sleep states non rapid eye movement (NREM) and rapid eye movement (REM) have different physiological components and contrasting effects on generalized ictal and interictal discharges. Besides the consolidated knowledge on sleep vs. wakefulness and NREM sleep vs. REM sleep, major attention should be paid to the circadian and homeostatic processes as well as to the conditions of stable and unstable sleep. Cyclic alternating pattern (CAP) analysis should be commonly applied in all sleep studies as a sensitive procedure for exploring the dynamic electroencephalogram (EEG) interplay between physiological phasic events and paroxysmal abnormalities.