Licorice (Glycyrrhiza glabra, GG) is one of the most frequently used herbal medicines worldwide, and its various biological activities have been widely studied. GG is reported to have neurological properties such as antidepressant, anxiolytic, and anticonvulsant effects. However, its hypnotic effects and the mechanism of GG and its active compounds have not yet been demonstrated. In this study, GG ethanol extract (GGE) dose-dependently potentiated pentobarbital-induced sleep and increased the amount of non-rapid eye movement sleep in mice without decreasing delta activity. The hypnotic effect of GGE was completely inhibited by flumazenil, which is a well-known γ-aminobutyric acid type A-benzodiazepine (GABA(A)-BZD) receptor antagonist, similar to other GABA(A)-BZD receptor agonists (e.g., diazepam and zolpidem). The major flavonoid glabrol was isolated from the flavonoid-rich fraction of GGE; it inhibited [(3)H] flumazenil binding to the GABA(A)-BZD receptors in rat cerebral cortex membrane with a binding affinity (K(i)) of 1.63 μM. The molecular structure and pharmacophore model of glabrol and liquiritigenin indicate that the isoprenyl groups of glabrol may play a key role in binding to GABA(A)-BZD receptors. Glabrol increased sleep duration and decreased sleep latency in a dose-dependent manner (5, 10, 25, and 50mg/kg); its hypnotic effect was also blocked by flumazenil. The results imply that GGE and its flavonoid glabrol induce sleep via a positive allosteric modulation of GABA(A)-BZD receptors.