The energy allocation (EA) model defines behavioral strategies that optimize the temporal utilization of energy to maximize reproductive success. This model proposes that all species of the animal kingdom share a universal sleep function that shunts waking energy utilization toward sleep-dependent biological investment. For endotherms, REM sleep evolved to enhance energy appropriation for somatic and CNS-related processes by eliminating thermoregulatory defenses and skeletal muscle tone. Alternating REM with NREM sleep conserves energy by decreasing the need for core body temperature defense. Three EA phenotypes are proposed: sleep–wake cycling, torpor, and continuous (or predominant) wakefulness. Each phenotype carries inherent costs and benefits. Sleep–wake cycling downregulates specific biological processes in waking and upregulates them in sleep, thereby decreasing energy demands imposed by wakefulness, reducing cellular infrastructure requirements, and resulting in overall energy conservation. Torpor achieves the greatest energy savings, but critical biological operations are compromised. Continuous wakefulness maximizes niche exploitation, but endures the greatest energy demands. The EA model advances a new construct for understanding sleep–wake organization in ontogenetic and phylogenetic domains.