Sleep and wakefulness are regulated primarily by inhibitory interactions between the hypothalamus and brainstem. The expression of the states of rapid eye movement (REM) sleep and non-REM (NREM) sleep also are correlated with the activity of groups of REM-off and REM-on neurons in the dorsal brainstem. However, the contribution of ventral brainstem nuclei to sleep regulation has been little characterized to date. Here we examined sleep and wakefulness in mice deficient in a homeobox transcription factor, Goosecoid-like (Gscl), which is one of the genes deleted in DiGeorge syndrome or 22q11 deletion syndrome. The expression of Gscl is restricted to the interpeduncular nucleus (IP) in the ventral region of the midbrain-hindbrain transition. The IP has reciprocal connections with several cell groups implicated in sleep/wakefulness regulation. Although Gscl(-/-) mice have apparently normal anatomy and connections of the IP, they exhibited a reduced total time spent in REM sleep and fewer REM sleep episodes. In addition, Gscl(-/-) mice showed reduced theta power during REM sleep and increased arousability during REM sleep. Gscl(-/-) mice also lacked the expression of DiGeorge syndrome critical region 14 (Dgcr14) in the IP. These results indicate that the absence of Gscl and Dgcr14 in the IP results in altered regulation of REM sleep.