Sleep is a dynamic process comprising multiple stages, each associated with distinct electrophysiological properties and potentially serving different functions. While these phenomena are well described in vertebrates, it is unclear if invertebrates have distinct sleep stages. We perform local field potential (LFP) recordings on flies spontaneously sleeping, and compare their brain activity to flies induced to sleep using either genetic activation of sleep-promoting circuitry or the GABAA agonist Gaboxadol. We find a transitional sleep stage associated with a 7-10 Hz oscillation in the central brain during spontaneous sleep. Oscillatory activity is also evident when we acutely activate sleep-promoting neurons in the dorsal fan-shaped body (dFB) of Drosophila. In contrast, sleep following Gaboxadol exposure is characterized by low-amplitude LFPs, during which dFB-induced effects are suppressed. Sleep in flies thus appears to involve at least two distinct stages: increased oscillatory activity, particularly during sleep induction, followed by desynchronized or decreased brain activity.