Sleep is a nearly universal feature of animal behaviour, yet many of the molecular, genetic, and neuronal substrates that orchestrate sleep/wake transitions lie undiscovered. Employing a viral insertion sleep screen in larval zebrafish, we identified a novel gene, dreammist (dmist), whose loss results in behavioural hyperactivity and reduced sleep at night. The neuronally expressed dmist gene is conserved across vertebrates and encodes a small single-pass transmembrane protein that is structurally similar to the Na+,K+-ATPase regulator, FXYD1/Phospholemman. Disruption of either fxyd1 or atp1a3a, a Na+,K+-ATPase alpha-3 subunit associated with several heritable movement disorders in humans, led to decreased night-time sleep. Since atpa1a3a and dmist mutants have elevated intracellular Na+ levels and non-additive effects on sleep amount at night, we propose that Dmist-dependent enhancement of Na+ pump function modulates neuronal excitability to maintain normal sleep behaviour.