Recurrent sleep-related hypoxia occurs in common disorders such as obstructive sleep apnea (OSA). The marked changes in sleep after treatment suggest that stimuli associated with OSA (e.g., intermittent hypoxia) may significantly modulate sleep regulation. However, no studies have investigated the independent effects of intermittent sleep-related hypoxia on sleep regulation and recovery sleep after removal of intermittent hypoxia. Ten rats were implanted with telemetry units to record the electroencephalogram (EEG), neck electromyogram, and body temperature. After >7 days recovery, a computer algorithm detected sleep-wake states and triggered hypoxic stimuli (10% O₂) or room air stimuli only during sleep for a 3-h period. Sleep-wake states were also recorded for a 3-h recovery period after the stimuli. Each rat received an average of 69.0 ± 6.9 hypoxic stimuli during sleep. The non-rapid eye movement (non-REM) and rapid-eye-movement (REM) sleep episodes averaged 50.1 ± 3.2 and 58.9 ± 6.6 s, respectively, with the hypoxic stimuli, with 32.3 ± 3.2 and 58.6 ± 4.8 s of these periods being spent in hypoxia. Compared with results for room air controls, hypoxic stimuli led to increased wakefulness (P < 0.005), nonsignificant changes in non-REM sleep, and reduced REM sleep (P < 0.001). With hypoxic stimuli, wakefulness episodes were longer and more frequent, non-REM periods were shorter and more frequent, and REM episodes were shorter and less frequent (P < 0.015). Hypoxic stimuli also increased faster frequencies in the EEG (P < 0.005). These effects of hypoxic stimuli were reversed on return to room air. There was a rebound increase in REM sleep, increased slower non-REM EEG frequencies, and decreased wakefulness (P < 0.001). The results show that sleep-specific hypoxia leads to significant modulation of sleep-wake regulation both during and after application of the intermittent hypoxic stimuli. This study is the first to determine the independent effects of sleep-related hypoxia on sleep regulation that approximates OSA before and after treatment.