Somatostatin (SST) is a neuropeptide with known inhibitory actions in the hypothalamus, where it inhibits release of growth hormone-releasing hormone (GHRH), while also influencing the sleep–wake cycle. Here we investigated in the rat whether SST neurons might additionally release GABA (gamma-aminobutyric acid) or glutamate in different regions and whether they might contact orexin neurons that play an important role in the maintenance of wakefulness. In dual-immunostained sections viewed by epifluorescence microscopy, we examined if SST varicosities were immunopositive for the vesicular transporter for GABA (VGAT) or glutamate (VGLUT2) in the posterolateral hypothalamus and neighboring arcuate nucleus and median eminence. Of the SST varicosities in the posterolateral hypothalamus, 18% were immunopositive for VGAT, whereas ≤ 1% were immunopositive for VGLUT2. In the arcuate and median eminence, 26 and 64% were VGAT+ and < 3% VGLUT2 + , respectively. In triple-immunostained sections viewed by epifluorescence and confocal microscopy, SST varicosities were seen in contact with orexin somata, and of these varicosities, a significant proportion (23%) contained VGAT along with synaptophysin, the presynaptic marker for small synaptic vesicles, and a similar proportion (25%) abutted puncta that were immunostained for gephyrin, the postsynaptic marker for GABAergic synapses. Our results indicate that a significant proportion of SST varicosities in the hypothalamus have the capacity to release GABA, to form inhibitory synapses upon orexin neurons, and accordingly through their peptide and/or amino acid, to inhibit orexin neurons, as well as GHRH neurons. Thus while regulating GHRH release, SST neurons could serve to attenuate arousal and permit progression through the sleep cycle.