The orexins (or hypocretins) are neuropeptide transmitters made exclusively in hypothalamic neurons that have extensive CNS projections. Previous studies reported that this system is most strongly associated with feeding, arousal and the maintenance of waking. We review here recent studies that reveal a novel and important role for the orexin/hypocretin neuronal system in reward processing and addiction. We propose that the current evidence indicates a dichotomy in orexin function, such that orexin neurons in the lateral hypothalamus regulate reward processing for both food and abused drugs, whereas those in the perifornical and dorsomedial hypothalamus regulate arousal and response to stress. Evidence also indicates roles for lateral hypothalamus orexin neurons and ventral tegmental orexin receptors in reward-based learning and memory.