In mammals, the suprachiasmatic nucleus (SCN) of the hypothalamus generates a 24 h rhythm of sleep and arousal. While neuronal spiking activity in the SCN provides a functional circadian oscillator that propagates throughout the brain, the ultradian sleep-wake state is regulated by the basal forebrain/preoptic area (BF/POA). How this SCN circadian oscillation is integrated into the shorter sleep-wake cycles remains unclear. We examined the temporal patterns of neuronal activity in these key brain regions in freely behaving rats. Neuronal activity in various brain regions presented diurnal rhythmicity and/or sleep-wake state dependence. We identified a diurnal rhythm in the BF/POA that was selectively degraded when diurnal arousal patterns were disrupted by acute brain serotonin depletion despite robust circadian spiking activity in the SCN. Local blockade of serotonergic transmission in the BF/POA was sufficient to disrupt the diurnal sleep-wake rhythm of mice. These results suggest that the serotonergic system enables the BF/POA to couple the SCN circadian signal to ultradian sleep-wake cycles, thereby providing a potential link between circadian rhythms and psychiatric disorders.