diff --git a/server/src/systems/__tests__/socialSystem.test.ts b/server/src/systems/__tests__/socialSystem.test.ts
index 3f37066..6f93a15 100644
--- a/server/src/systems/__tests__/socialSystem.test.ts
+++ b/server/src/systems/__tests__/socialSystem.test.ts
@@ -109,10 +109,10 @@ describe('socialSystem', () => {
       expect(sb.phase).toBe('none');
     });
 
-    it('rejects target on rest goal with low energy', () => {
+    it('rejects target on sleep goal with low energy', () => {
       const world = new World();
       const a = createNPC(world, 5, 5);
-      const b = createNPC(world, 8, 5, { goal: 'rest', energy: ENERGY_THRESHOLD - 5 });
+      const b = createNPC(world, 8, 5, { goal: 'sleep', energy: ENERGY_THRESHOLD - 5 });
       socialSystem(world);
       const sa = world.getComponent<SocialState>(a, 'socialState')!;
       const sb = world.getComponent<SocialState>(b, 'socialState')!;
diff --git a/server/src/systems/__tests__/systems.test.ts b/server/src/systems/__tests__/systems.test.ts
index 73d15fe..ea3e537 100644
--- a/server/src/systems/__tests__/systems.test.ts
+++ b/server/src/systems/__tests__/systems.test.ts
@@ -127,14 +127,14 @@ describe('npcBrainSystem', () => {
     expect(brain.currentGoal).toBe('eat');
   });
 
-  it('sets rest goal when energy is low', () => {
+  it('sets sleep goal when energy is low', () => {
     const world = new World();
     const map = new GameMap(10, 10);
     map.addPointOfInterest({ type: 'rest', position: { x: 7, y: 7 } });
     const e = createNPC(world, 5, 5, 80, 10);
     npcBrainSystem(world, map);
     const brain = world.getComponent<NPCBrain>(e, 'npcBrain')!;
-    expect(brain.currentGoal).toBe('rest');
+    expect(brain.currentGoal).toBe('sleep');
   });
 
   it('prioritizes energy over hunger', () => {
@@ -145,7 +145,7 @@ describe('npcBrainSystem', () => {
     const e = createNPC(world, 5, 5, 15, 10);
     npcBrainSystem(world, map);
     const brain = world.getComponent<NPCBrain>(e, 'npcBrain')!;
-    expect(brain.currentGoal).toBe('rest');
+    expect(brain.currentGoal).toBe('sleep');
   });
 
   it('sets gather goal when productivity is low', () => {
@@ -160,7 +160,7 @@ describe('npcBrainSystem', () => {
     expect(brain.currentGoal).toBe('gather');
   });
 
-  it('prioritizes rest and eat over gather', () => {
+  it('prioritizes sleep and eat over gather', () => {
     const world = new World();
     const map = new GameMap(10, 10);
     map.addPointOfInterest({ type: 'rest', position: { x: 7, y: 7 } });
@@ -170,7 +170,7 @@ describe('npcBrainSystem', () => {
     needs.productivity = 30;
     npcBrainSystem(world, map);
     const brain = world.getComponent<NPCBrain>(e, 'npcBrain')!;
-    expect(brain.currentGoal).toBe('rest');
+    expect(brain.currentGoal).toBe('sleep');
   });
 
   it('sets wander when productivity is above threshold', () => {
diff --git a/server/src/systems/industrySystem.ts b/server/src/systems/industrySystem.ts
index 44f2086..b315c5b 100644
--- a/server/src/systems/industrySystem.ts
+++ b/server/src/systems/industrySystem.ts
@@ -55,7 +55,7 @@ export function industrySystem(world: World, map: GameMap): void {
     if (brain.currentGoal === 'craft' && world.getComponent<CraftingState>(entity, 'craftingState')) continue;
     if (brain.currentGoal === 'build' && world.getComponent<BuildingState>(entity, 'buildingState')) continue;
     if (brain.currentGoal === 'gather' && world.getComponent<GatheringState>(entity, 'gatheringState')) continue;
-    if (brain.currentGoal === 'gather' || brain.currentGoal === 'eat' || brain.currentGoal === 'rest') continue;
+    if (brain.currentGoal === 'gather' || brain.currentGoal === 'eat' || brain.currentGoal === 'sleep') continue;
     if (brain.currentGoal === 'dropoff') continue;
     if (brain.currentGoal === 'pickup') continue;
 
diff --git a/server/src/systems/npcBrainSystem.ts b/server/src/systems/npcBrainSystem.ts
index 81ae51e..2124584 100644
--- a/server/src/systems/npcBrainSystem.ts
+++ b/server/src/systems/npcBrainSystem.ts
@@ -78,7 +78,7 @@ export function npcBrainSystem(world: World, map: GameMap, eventMemoryService?:
       }
       brain.currentGoal = null;
     }
-    if (brain.currentGoal === 'rest' && movement.state === 'idle') {
+    if (brain.currentGoal === 'sleep' && movement.state === 'idle') {
       const prevEnergy = needs.energy;
       needs.energy = Math.min(100, needs.energy + 20);
       if (eventMemoryService && prevEnergy < ENERGY_THRESHOLD && needs.energy >= ENERGY_THRESHOLD) {
@@ -117,7 +117,7 @@ export function npcBrainSystem(world: World, map: GameMap, eventMemoryService?:
     // Determine new goal based on needs priority
     const prevGoal = brain.currentGoal;
     let goal: GoalType = 'wander';
-    if (needs.energy < ENERGY_THRESHOLD) goal = 'rest';
+    if (needs.energy < ENERGY_THRESHOLD) goal = 'sleep';
     else if (needs.hunger < HUNGER_THRESHOLD) goal = 'eat';
     else if (needs.productivity < PRODUCTIVITY_THRESHOLD) goal = 'gather';
 
@@ -125,7 +125,7 @@ export function npcBrainSystem(world: World, map: GameMap, eventMemoryService?:
 
     if (eventMemoryService && brain.currentGoal !== prevGoal && prevGoal !== null) {
       const name = world.getComponent<string>(entity, 'name') ?? 'Unknown';
-      const goalLabels: Record<string, string> = { wander: 'wandering', eat: 'looking for food', rest: 'looking for rest', gather: 'looking for resources', craft: 'crafting', build: 'building', dropoff: 'dropping off items', pickup: 'picking up materials' };
+      const goalLabels: Record<string, string> = { wander: 'wandering', eat: 'looking for food', sleep: 'sleeping', gather: 'looking for resources', craft: 'crafting', build: 'building', dropoff: 'dropping off items', pickup: 'picking up materials' };
       eventMemoryService.record(entity, {
         type: 'goal_change',
         tick: 0,
@@ -139,7 +139,7 @@ export function npcBrainSystem(world: World, map: GameMap, eventMemoryService?:
     let target: Position | null = null;
     if (goal === 'eat') {
       target = closestPOI(map, pos, 'food');
-    } else if (goal === 'rest') {
+    } else if (goal === 'sleep') {
       target = closestPOI(map, pos, 'rest');
     } else if (goal === 'gather') {
       target = findNearestResource(map, pos);
diff --git a/server/src/systems/socialSystem.ts b/server/src/systems/socialSystem.ts
index a0096fe..0b1d66f 100644
--- a/server/src/systems/socialSystem.ts
+++ b/server/src/systems/socialSystem.ts
@@ -33,7 +33,7 @@ function isTargetBusy(world: World, target: EntityId): boolean {
   const needs = world.getComponent<Needs>(target, 'needs');
   if (!needs) return false;
   if (brain.currentGoal === 'eat' && needs.hunger < HUNGER_THRESHOLD) return true;
-  if (brain.currentGoal === 'rest' && needs.energy < ENERGY_THRESHOLD) return true;
+  if (brain.currentGoal === 'sleep' && needs.energy < ENERGY_THRESHOLD) return true;
   return false;
 }
 
diff --git a/shared/src/constants.ts b/shared/src/constants.ts
index 03bf607..080496d 100644
--- a/shared/src/constants.ts
+++ b/shared/src/constants.ts
@@ -16,6 +16,14 @@ export const HUNGER_THRESHOLD = 30;
 export const ENERGY_THRESHOLD = 20;
 export const NEED_RECOVERY_RATE = 0.5;
 
+// Sleep system
+export const SLEEP_ENERGY_RECOVERY_PER_TICK = 0.048; // ~80 energy over one night (~1667 ticks)
+export const SLEEP_HUNGER_DECAY_MULTIPLIER = 0.5;    // hunger decays at half rate while sleeping
+export const SLEEP_WAKE_THRESHOLD = 85;              // energy level where waking chance begins
+export const SLEEP_VOLUNTARY_ENERGY_THRESHOLD = 60;  // nighttime voluntary sleep threshold
+export const SLEEP_NIGHT_START = 0.667;              // gameTime when night begins (DAY_HOURS/TOTAL_HOURS)
+export const SLEEP_NIGHT_END = 1.0;                  // gameTime when night ends (wraps to 0.0)
+
 // Productivity need
 export const PRODUCTIVITY_DECAY_PER_TICK = 0.02;
 export const PRODUCTIVITY_THRESHOLD = 40;
diff --git a/shared/src/types.ts b/shared/src/types.ts
index 954d61c..ef33a64 100644
--- a/shared/src/types.ts
+++ b/shared/src/types.ts
@@ -80,7 +80,7 @@ export interface StatModifiers {
 }
 
 export type MovementState = 'idle' | 'walking';
-export type GoalType = 'wander' | 'eat' | 'rest' | 'gather' | 'craft' | 'build' | 'dropoff' | 'pickup';
+export type GoalType = 'wander' | 'eat' | 'sleep' | 'gather' | 'craft' | 'build' | 'dropoff' | 'pickup';
 
 export interface Movement {
   state: MovementState;