T-type Ca2+ channels (T channels) underlie rhythmic burst discharges during neuronal oscillations that are typical during sleep. However, the Ca2+-dependent effectors that are selectively regulated by T currents remain unknown. We found that, in dendrites of nucleus reticularis thalami (nRt), intracellular Ca2+ concentration increases were dominated by Ca2+ influx through T channels and shaped rhythmic bursting via competition between Ca2+-dependent small-conductance (SK)-type K+ channels and Ca2+ uptake pumps. Oscillatory bursting was initiated via selective activation of dendritically located SK2 channels, whereas Ca2+ sequestration by sarco/endoplasmic reticulum Ca2+-ATPases (SERCAs) and cumulative T channel inactivation dampened oscillations. Sk2-/- (also known as Kcnn2) mice lacked cellular oscillations, showed a greater than threefold reduction in low-frequency rhythms in the electroencephalogram of non-rapid-eye-movement sleep and had disrupted sleep. Thus, the interplay of T channels, SK2 channels and SERCAs in nRt dendrites comprises a specialized Ca2+ signaling triad to regulate oscillatory dynamics related to sleep.