The mechanisms of arousal from apneas during sleep in patients suffering from obstructive sleep apnea are not well understood. However, we know that respiratory chemosensory pathways converge on the parabrachial nucleus (PB), which sends glutamatergic projections to a variety of forebrain structures critical to arousal, including the basal forebrain, lateral hypothalamus, midline thalamus, and cerebral cortex. We tested the role of glutamatergic signaling in this pathway by developing an animal model for repetitive CO2 arousals (RCAs) and investigating the effect of deleting the gene for the vesicular glutamate transporter 2 (Vglut2) from neurons in the PB. We used mice with lox P sequences flanking exon2 of the Vglut2 gene, in which adeno-associated viral vectors containing genes encoding Cre recombinase and green fluorescent protein were microinjected into the PB to permanently and selectively disrupt Vglut2 expression while labeling the affected neurons. We recorded sleep in these mice and then investigated the arousals during RCA. Vglut2 deletions that included the external lateral and lateral crescent subdivisions of the lateral PB more than doubled the latency to arousal and resulted in failure to arouse by 30 s in >30% of trials. By contrast, deletions that involved the medial PB subdivision had minimal effects on arousal during hypercapnia but instead increased non-rapid eye movement (NREM) sleep by ∼43% during the dark period, and increased delta power in the EEG during NREM sleep by ∼50%. Our results suggest that glutamatergic neurons in the lateral PB are necessary for arousals from sleep in response to CO2, while medial PB glutamatergic neurons play an important role in promoting spontaneous waking.