In spite of advances in understanding the processes that generate and maintain sleep, the functional significance of sleep remains a mystery. Numerous theories regarding sleep's function have been proposed, including homeostatic restoration, thermoregulation, tissue repair, and immune control, but the theory that has received enormous attention in the last decade concerns sleep's role in processing and storing memories. This article reviews evidence that sleep is critical for long-lasting memories. Although this article mostly focuses on memory consolidation, it also briefly reviews new evidence that sleep is essential for effective memory encoding.