To understand how female sex hormones influence homeostatic mechanisms of sleep, we studied the effects of estradiol (E2) replacement on c-Fos immunoreactivity in sleep/wake-regulatory brain areas after sleep deprivation (SD) in ovariectomized rats. Adult rats were ovariectomized and implanted subcutaneously with capsules containing 17β-E2 (10.5 μg; to mimic diestrous E2 levels) or oil. After 2 wk, animals with E2 capsules received a single subcutaneous injection of 17β-E2 (10 μg/kg; to achieve proestrous E2 levels) or oil; control animals with oil capsules received an oil injection. Twenty-four hours later, animals were either left undisturbed or sleep deprived by “gentle handling” for 6 h during the early light phase, and killed. E2 treatment increased serum E2 levels and uterus weights dose dependently, while attenuating body weight gain. Regardless of hormonal conditions, SD increased c-Fos immunoreactivity in all four arousal-promoting areas and four limbic and neuroendocrine nuclei studied, whereas it decreased c-Fos labeling in the sleep-promoting ventrolateral preoptic nucleus (VLPO). Low and high E2 treatments enhanced the SD-induced c-Fos immunoreactivity in the laterodorsal subnucleus of the bed nucleus of stria terminalis and the tuberomammillary nucleus, and in orexin-containing hypothalamic neurons, with no effect on the basal forebrain and locus coeruleus. The high E2 treatment decreased c-Fos labeling in the VLPO under nondeprived conditions. These results indicate that E2 replacement modulates SD-induced or spontaneous c-Fos expression in sleep/wake-regulatory and limbic forebrain nuclei. These modulatory effects of E2 replacement on neuronal activity may be, in part, responsible for E2's influence on sleep/wake behavior.