The {beta}-secretase BACE1 has become a prime target in Alzheimers disease (AD) therapy, because it drives the production of pathogenic amyloid {beta} peptides. However, clinical trials with BACE1-targeting drugs were halted due to adverse effects on cognitive performance. We propose here that cognitive impairment by BACE1 inhibitors may be a corollary of a higher function of BACE1 related to proper sleep regulation. To address non-enzymatic effects of BACE1 on ion channels likely involved in the sleep-wake cycle, we analyzed sleep patterns in both BACE1-KO mice and a newly generated transgenic line expressing a proteolysis-deficient BACE1 variant (BACE1-KI). We found that BACE1-KI and BACE1-KO mice displayed common and distinct sleep-wake disturbances. Compared to their respective wild-type littermates, both mutant lines slept less during the light phase (when they preferentially rest). Furthermore, transition rates between wake and sleep states were altered, as were sleep spindles and EEG power spectra in the gamma range. Thus, a better understanding of how BACE1 interferes with sleep-modulated behaviors is needed if clinical trials with BACE1-targeted inhibitors are to resume.