Background Sleep-wake dysfunction is an early and common event in Alzheimer’s disease (AD). The lateral hypothalamic area (LHA) regulates the sleep and wake cycle through wake-promoting orexinergic neurons (Orx N ) and sleep-promoting melanin-concentrating hormone or MCHergic neurons (MCH N ). These neurons share close anatomical proximity with functional reciprocity. This study investigated LHA Orx N and MCH N loss patterns in AD individuals. Understanding the degeneration pattern of these neurons will be instrumental in designing potential therapeutics to slow down the disease progression and remediate the sleep-wake dysfunction in AD. Methods Postmortem human brain tissue from donors with AD (across progressive stages) and controls were examined using unbiased stereology. Formalin-fixed, celloidin-embedded hypothalamic sections were stained with Orx-A/MCH, p-tau (CP13), and counterstained with gallocyanin. Orx or MCH-positive neurons with or without CP13 inclusions and gallocyanin-stained neurons were considered for stereology counting. Additionally, we extracted RNA from the LHA using conventional techniques. We used customized Neuropathology and Glia nCounter ® (Nanostring) panels to study gene expression. Wald statistical test was used to compare the groups, and the genes were considered differentially expressed when the p-value was <.05. Results We observed a progressive decline in Orx N alongside a relative preservation of MCH N . Orx N decreased by 58% (p=.03) by Braak stages (BB) 1-2 and further declined to 81% (p=.03) by BB 5-6. Conversely, MCH N demonstrated a non-statistical significant decline (27%, p=.1088) by BB 6. We observed a progressive increase in differentially expressed genes (DEGs), starting with glial profile changes in BB2. While Orx N loss was observed, Orx-related genes showed upregulation in BB 3-4 compared to BB 0-1. GO and KEGG terms related to neuroinflammatory pathways were mainly enriched. Conclusions To date, Orx N loss in the LHA represents the first neuronal population to die preceding the loss of LC neurons. Conversely, MCHN shows resilience to AD p-tau accumulation across Braak stages. The initial loss of Orx N correlates with specific neuroinflammation, glial profile changes, and overexpression of HCRT, possibly due to hyperexcitation following compensation mechanisms. Interventions preventing Orx N loss and inhibiting p-tau accumulation in the LHA could prevent neuronal loss in AD and, perhaps, the progression of the disease.