Sleep homeostasis is the process by which recovery sleep is generated by prolonged wakefulness. The molecular mechanisms underlying this important phenomenon are poorly understood. We have previously shown that nitric oxide (NO) generation increases in the basal forebrain (BF) during sleep deprivation (SD). Moreover, both NO synthase (NOS) inhibition and a NO scavenger prevented recovery sleep induction, while administration of a NO donor during the spontaneous sleep–wake cycle increased sleep, indicating that NO is necessary and sufficient for the induction of recovery sleep. Next we wanted to know which NOS isoform is involved in the production of recovery sleep. Using in vivo microdialysis we infused specific inhibitors of NOS into the BF of rats during SD, and found that an inhibitor of inducible NOS (iNOS), 1400W, prevented non-rapid eye movement (NREM) recovery, while an inhibitor of neuronal NOS (nNOS), L-N-propyl-arginine, decreased REM recovery but did not affect NREM recovery. Using immunoblot analysis we found that iNOS was not expressed during the spontaneous sleep–wake cycle, but was induced by prolonged wakefulness (increased by 278%). A known iNOS inducer, lipopolysaccharide, evoked an increase in sleep that closely resembled recovery sleep, and its effects were abolished by 1400W. These results suggest that the elevation of NO produced by induction of iNOS in the BF during prolonged wakefulness is a specific mechanism for producing NREM recovery sleep and that the two NOS isoforms have a complementary role in NREM and REM recovery induction.