Ensuing REM sleep may stabilize transformed memories. Consolidation originates from reactivation of recently encoded neuronal memory representations, which occur during SWS and transform respective representations for integration into long-term memory. Specifically, newer findings characterize sleep as a brain state optimizing memory consolidation, in opposition to the waking brain being optimized for encoding of memories. Whereas older research concentrated on the role of rapid-eye-movement (REM) sleep, recent work has revealed the importance of slow-wave sleep (SWS) for memory consolidation and also enlightened some of the underlying electrophysiological, neurochemical, and genetic mechanisms, as well as developmental aspects in these processes. Whereas initial theories posed a passive role for sleep enhancing memories by protecting them from interfering stimuli, current theories highlight an active role for sleep in which memories undergo a process of system consolidation during sleep. In this review we aim to comprehensively cover the field of “sleep and memory” research by providing a historical perspective on concepts and a discussion of more recent key findings. Over more than a century of research has established the fact that sleep benefits the retention of memory.