Narcolepsy is a rare brain disorder that reflects a selective loss or dysfunction of orexin (also known as hypocretin) neurons of the lateral hypothalamus. Narcolepsy type 1 (NT1) is characterized by excessive daytime sleepiness and cataplexy, accompanied by sleep-wake symptoms, such as hallucinations, sleep paralysis and disturbed sleep. Diagnosis is based on these clinical features and supported by biomarkers: evidence of rapid eye movement sleep periods soon after sleep onset; cerebrospinal fluid orexin deficiency; and positivity for HLA-DQB1*06:02. Symptomatic treatment with stimulant and anticataplectic drugs is usually efficacious. This Review focuses on our current understanding of how genetic, environmental and immune-related factors contribute to a prominent (but not isolated) orexin signalling deficiency in patients with NT1. Data supporting the view of NT1 as a hypothalamic disorder affecting not only sleep-wake but also motor, psychiatric, emotional, cognitive, metabolic and autonomic functions are presented, along with uncertainties concerning the 'narcoleptic borderland', including narcolepsy type 2 (NT2). The limitations of current diagnostic criteria for narcolepsy are discussed, and a possible new classification system incorporating the borderland conditions is presented. Finally, advances and obstacles in the symptomatic and causal treatment of narcolepsy are reviewed.