Narcolepsy, characterized by excessive daytime sleepiness, is associated with dysfunction of the hypothalamic hypocretin/orexin (Hcrt) system, either due to extensive loss of Hcrt cells (Type 1, NT1) or hypothesized Hcrt signaling impairment (Type 2, NT2). Accordingly, efforts to recapitulate narcolepsy-like symptoms in mice have involved ablating these cells or interrupting Hcrt signaling. Here, we describe orexin/Arch mice, in which a modified archaerhodopsin-3 gene was inserted downstream of the prepro-orexin promoter, resulting in expression of the yellow light-sensitive Arch-3 proton pump specifically within Hcrt neurons. Histological examination along with ex vivo and in vivo electrophysiological recordings of male and female orexin/Arch mice demonstrated silencing of Hcrt neurons when these cells were photoilluminated. However, high expression of the Arch transgene affected cellular and physiological parameters independent of photoillumination. The excitability of Hcrt neurons was reduced, and both circadian and metabolic parameters were perturbed in a subset of orexin/Arch mice that exhibited high levels of Arch expression. Orexin/Arch mice also had increased REM sleep under baseline conditions but did not exhibit cataplexy, a sudden loss of muscle tone during wakefulness characteristic of NT1. These aberrations resembled some aspects of mouse models with Hcrt neuron ablation, yet the number of Hcrt neurons in orexin/Arch mice was not reduced. Thus, orexin/Arch mice may be useful to investigate Hcrt system dysfunction when these neurons are intact, as is thought to occur in narcolepsy without cataplexy (NT2). These results also demonstrate the utility of extended phenotypic screening of transgenic models when specific neural circuits have been manipulated.SIGNIFICANCE STATEMENT Optogenetics has become an invaluable tool for functional dissection of neural circuitry. While opsin expression is often achieved by viral injection, stably integrated transgenes offer some practical advantages. Here, we demonstrate successful transgenic expression of an inhibitory opsin in hypocretin/orexin neurons, which are thought to promote or maintain wakefulness. Both brief and prolonged illumination resulted in inhibition of these neurons and induced sleep. However, even in the absence of illumination, these cells exhibited altered electrical characteristics, particularly when transgene expression was high. These aberrant properties affected metabolism and sleep, resulting in a phenotype reminiscent of the narcolepsy Type 2, a sleep disorder for which no good animal model currently exists.