The sleep lab is an isolated room in the basement of the hospital which has facilities to monitor a sleeping patient, such as a dedicated EEG and an observation room that allows the doctors to discuss the patient's case without risk of disturbing the patient's sleep. It's preferred to treating the patient in a regular hospital room as the regular routine of the hospital could result in disturbed sleep for the patient.
The sleep lab has appeared in several episodes including Paternity, Let Them Eat Cake, and Top Secret.