There is a long-standing controversy about the role of serotonin in sleep/wake control, with competing theories that it either promotes sleep or causes arousal. Here, we show that there is a marked increase in wakefulness when all serotonin neurons are genetically deleted in mice hemizygous for ePet1-Cre and homozygous for floxed Lmx1b (Lmx1b^f/f/p). However, this only occurs at cool ambient temperatures and can be explained by a thermoregulatory defect that leads to an increase in motor activity to generate heat. Because some serotonin neurons are stimulated by CO₂, and serotonin activates thalamocortical networks, we hypothesized that serotonin neurons cause arousal in response to hypercapnia. We found that Lmx1b^f/f/p mice completely lacked any arousal response to inhalation of 10% CO₂ (with 21% O₂ in balance N₂) but had normal arousal responses to hypoxia, sound, and air puff. We propose that serotonin neurons mediate the potentially life-saving arousal response to hypercapnia. Impairment of this response may contribute to sudden unexpected death in epilepsy, sudden infant death syndrome, and sleep apnea.