The lateral hypothalamus (LHA) is an evolutionarily conserved structure that regulates basic functions of an organism, particularly wakefulness. To clarify the function of LHAGABA neurons and their projections on regulating general anesthesia is crucial for understanding the excitatory and inhibitory effects of anesthetics on the brain. The aim of the present study is to investigate whether LHAGABA neurons play either an inhibitory or a facilitatory role in sevoflurane-induced anesthetic arousal regulation. We used fiber photometry and immunofluorescence staining to monitor changes in neuronal activity during sevoflurane anesthesia. Opto-/chemogenetic modulations were employed to study the effect of neurocircuit modulations during the anesthesia. Anterograde tracing was used to identify a GABAergic projection from the LHA to a periaqueductal gray (PAG) subregion. c-Fos staining showed that LHAGABA activity was inhibited by induction of sevoflurane anesthesia. Anterograde tracing revealed that LHAGABA neurons project to multiple arousal-associated brain areas, with the lateral periaqueductal gray (LPAG) being one of the dense projection areas. Optogenetic experiments showed that activation of LHAGABA neurons and their downstream target LPAG reduced the burst suppression ratio (BSR) during continuous sevoflurane anesthesia. Chemogenetic experiments showed that activation of LHAGABA and its projection to LPAG neurons prolonged the anesthetic induction time and promoted wakefulness. In summary, we show that an inhibitory projection from LHAGABA to LPAGGABA neurons promotes arousal from sevoflurane-induced loss of consciousness, suggesting a complex control of wakefulness through intimate interactions between long-range connections.