Parkinson's disease patients report disturbed sleep patterns long before motor dysfunction. Here, in parkin and pink1 models, we identify circadian rhythm and sleep pattern defects and map these to specific neuropeptidergic neurons in fly models and in hypothalamic neurons differentiated from patient induced pluripotent stem cells (iPSCs). Parkin and Pink1 control the clearance of mitochondria by protein ubiquitination. Although we do not observe major defects in mitochondria of mutant neuropeptidergic neurons, we do find an excess of endoplasmic reticulum-mitochondrial contacts. These excessive contact sites cause abnormal lipid trafficking that depletes phosphatidylserine from the endoplasmic reticulum (ER) and disrupts the production of neuropeptide-containing vesicles. Feeding mutant animals phosphatidylserine rescues neuropeptidergic vesicle production and acutely restores normal sleep patterns in mutant animals. Hence, sleep patterns and circadian disturbances in Parkinson's disease models are explained by excessive ER-mitochondrial contacts, and blocking their formation or increasing phosphatidylserine levels rescues the defects in vivo.