Recent studies have begun to understand sleep not only as a whole-brain process but also as a complex local phenomenon controlled by specific neurotransmitters that act in different neural networks, which is called “local sleep”. Moreover, the basic states of human consciousness—wakefulness, sleep onset (N1), light sleep (N2), deep sleep (N3), and rapid eye movement (REM) sleep—can concurrently appear, which may result in different sleep-related dissociative states. In this article, we classify these sleep-related dissociative states into physiological, pathological, and altered states of consciousness. Physiological states are daydreaming, lucid dreaming, and false awakenings. Pathological states include sleep paralysis, sleepwalking, and REM sleep behavior disorder. Altered states are hypnosis, anesthesia, and psychedelics. We review the neurophysiology and phenomenology of these sleep-related dissociative states of consciousness and update them with recent studies. We conclude that these sleep-related dissociative states have a significant basic and clinical impact since their study contributes to the understanding of consciousness and the proper treatment of neuropsychiatric diseases.