Sleep and emotion have been linked since the discovery of rapid eye movement (REM) sleep sixty years ago. Sleep, in particular REM sleep and the dreams it harbors, seems to modulate mood, restoring stability to the weary mind. Scientists have struggled to understand this link through the biological study of the brain, the psychological study of dreaming, and the clinical study of how sleep is affected by psychiatric illness. This thesis examines the history of sleep research in terms of its relationship to emotional processing, both from the physiological and the psychological perspective. We are introduced to the scientists who discovered REM in 1953, to those who tracked the links between the biochemistry of mood and of sleep, and to contemporary researchers who are exploring the link between sleep and mood using brain-scanners and electrodes to study the dreaming brain, and the sleep and dreaming of patients with mood disorders. On our journey we will experience both the progress sleep research has made this century, and the enduring mystery of why humans sleep and dream.