Recent findings in infant rats suggest that the preoptic area (POA) and/or basal forebrain (BF) contribute to developmental changes in sleep and wake organization between postnatal day 2 (P2) and P9. To examine the contributions of these forebrain areas to sleep and wakefulness, separate lesions of the POA or BF, or combined lesions (POA + BF), were performed at P9, and precollicular transections were performed at P2. In addition, modafinil, a drug of unknown mechanism of action the effects of which on sleep and wakefulness have been hypothesized to result from inhibition of POA activity, was administered at P2 and P9. Finally, extracellular neuronal activity was recorded from the POA and BF. POA lesions decreased sleep bout durations and increased wake bout durations. BF lesions inhibited sleep bout durations to a lesser extent, while leaving wake bout durations unaffected. POA + BF lesions produced a combination of these effects, resulting in short bouts of sleep and wakefulness similar to those of transected P8 rats. Even at P2, transections decreased sleep bout durations. The finding, however, that the sleep-inhibiting and wake-promoting effects of modafinil were more potent at P9 than at P2 suggests increasing sleep-wake modulation by the POA between these two ages. Finally, neuronal recordings confirmed the presence of state-dependent neurons within the infant POA and BF. We propose that the POA, in addition to promoting sleep, inhibits wakefulness via direct and indirect inhibitory connections with wake-promoting neurons in the BF, and that this inhibitory influence increases across early development.