Sleep is indispensable for health and wellbeing, but its basic function remains elusive. The locus coeruleus (LC) powerfully promotes arousal by releasing noradrenaline. We found that noradrenaline transmission is reduced by prolonged wakefulness and restored during sleep. Fiber-photometry imaging of noradrenaline using its biosensor showed that its release evoked by optogenetic LC neuron activation was strongly attenuated by three hours of sleep deprivation and restored during subsequent sleep. This is accompanied by the reduction and recovery of the wake-promoting effect of the LC neurons. The reduction of both LC evoked noradrenaline release and wake-inducing potency is activity dependent, and the rate of noradrenaline transmission recovery depends on mammalian target of rapamycin (mTOR) signaling. The decline and recovery of noradrenaline transmission also occur in spontaneous sleep-wake cycles on a timescale of minutes. Together, these results reveal an essential role of sleep in restoring transmission of a key arousal-promoting neuromodulator.