Emotions are biologically-based responses that help an organism meet challenges and opportunities, and involve changes in subjective experience, behavior, and physiology. Emotions arise when something important to us is at stake. Although many factors have been associated with healthy emotional regulation, the role of sleep in this process has been largely ignored. Recent studies, however, have begun to delineate how sleep critically affects emotional functioning. Nighttime sleep affects daytime mood, emotional reactivity and the capacity to regulate positive and negative emotions; conversely, daytime experiences affect sleep. Hence, there is a complex interplay between sleep and emotional regulation. The objective of this article is to examine this interplay in adults. This objective is addressed by utilizing a framework that identifies key aspects of the relationship between sleep and emotion. We propose that the connectivity between the emotional centers of the brain--the prefontal cortex and the amygdala--is in part dependent on the homeostatic sleep system such that connectivity between these brain networks is higher when rested and lower when sleep deprived. High connectivity drives more efficient executive functioning, while a disconnect leads to poor executive functioning capacity including emotional reactivity and impulsivity. The cognitive effects of the homeostatic system are couple with the mood regulation effects of the circadian system together dictating the degree to which one experiences emotional regulation or dysregulation. Further, the affective brain systems of individuals with clinical symptomology and/or pathology are suggested to be more vulnerable to homeostatic pressure and circadian lows or misalignment resulting in increased affective clinical symptomology. We review empirical evidence that supports this framework and explore the implications of this framework. Finally, we describe future directions for this type of work.