Insomnia is often comorbid with depression, but the underlying neuronal circuit mechanism remains elusive. Recently, we reported that GABAergic ventral pallidum (VP) neurons control wakefulness associated with motivation. However, whether and how other subtypes of VP neurons regulate arousal and emotion are largely unknown. Here, we report glutamatergic VP (VP) neurons control wakefulness and depressive-like behaviors. Physiologically, the calcium activity of VP neurons was increased during both NREM sleep-to-wake transitions and depressive/anxiety-like behaviors in mice. Functionally, activation of VP neurons was sufficient to increase wakefulness and induce anxiety/depressive-like behaviors, whereas inhibition attenuated both. Dissection of the circuit revealed that separated projections of VP neurons to the lateral hypothalamus and lateral habenula promote arousal and depressive-like behaviors, respectively. Our results demonstrate a subtype of VP neurons is responsible for wakefulness and emotion through separated projections, and may provide new lines for the intervention of insomnia and depression in patients.