Summary The output arm of the sleep homeostat in Drosophila is a group of neurons with projections to the dorsal fan-shaped body (dFSB) of the central complex in the brain. However, neurons that regulate the sleep homeostat remain poorly understood. Using neurogenetic approaches combined with ex vivo Ca 2+ imaging, we identify two groups of sleep-regulatory neurons that modulate the activity of the sleep homeostat in an opposing fashion. The sleep-promoting neurons activate the sleep homeostat with glutamate, whereas the arousal-promoting neurons down-regulate the sleep homeostat’s output with dopamine. Co-activating these two inputs leads to frequent shifts between sleep and wake states. We also show that dFSB sleep homeostat neurons release the neurotransmitter GABA that inhibits octopaminergic arousal neurons. Taken together, we suggest coordinated neuronal activity of sleep- and arousal-promoting neurons is essential for stabilizing sleep/wake states. Highlights Glutamate released by AstA neurons activates dFSB AstAR1 sleep-promoting neurons Dopamine down-regulates the activity of dFSB AstAR1 neurons Simultaneous glutamate and dopamine input causes rapid sleep and awake swings GABA released by dFSB AstAR1 neurons promotes sleep by inhibiting arousal neurons