The increasing prevalence of sleep deprivation poses a public health challenge in modern society. Manifestations of reduced alertness, such as slowed reaction times and increased errors, are well-documented behavioral indicators of sleep loss (SL). Yet, the biological consequences of sleep deprivation and their role in behavioral impairment remain elusive. Our study reveals significant effects of sleep deprivation on myelin integrity. As a result, we identify increased conduction delays in nerve signal propagation, hindered interhemispheric synchronization, and impaired cognitive and motor performance associated with SL. By profiling oligodendrocyte transcriptome and lipidome, we observe SL-induced endoplasmic reticulum stress and lipid metabolism dysregulation, particularly affecting cholesterol homeostasis.