Abstract Background The basal nucleus of Meynert (BNM), a primary source of cholinergic projections to the cortex, plays key roles in regulating the sleep-wake cycle and attention. Sleep deficit is associated with impairment in cognitive and emotional functions. However, whether or how cholinergic circuit, sleep, and cognitive/emotional dysfunction are inter-related remains unclear. Methods We curated the Human Connectome Project data and explored BNM resting state functional connectivities (rsFC) in relation to sleep deficit, based on the Pittsburgh Sleep Quality Index (PSQI), cognitive performance, and subjective reports of emotional states in 687 young adults (342 women). Imaging data were processed with published routines and evaluated at a corrected threshold. We assessed the correlation between BNM rsFC, PSQI, and clinical measurements with Pearson regressions and their inter-relationships with mediation analyses. Results In whole-brain regressions with age and alcohol use severity as covariates, men showed lower BNM rsFC with the posterior cingulate cortex (PCC) in correlation with PSQI score. No clusters were identified in women at the same threshold. Both BNM-PCC rsFC and PSQI score were significantly correlated with anxiety, perceived stress, and neuroticism scores in men. Moreover, mediation analyses showed that PSQI score mediated the relationship between BNM-PCC rsFC and these measures of negative emotions bidirectionally in men. Conclusions Sleep deficit is associated with negative emotions and lower BNM rsFC with the PCC. Negative emotional states and BNM-PCC rsFC are bidirectionally related through poor sleep quality. These findings are specific to men, suggesting potential sex differences in the neural circuits regulating sleep and emotional states.