Although CGRP neurons in the external lateral parabrachial nucleus (PBelCGRP neurons) are critical for cortical arousal in response to hypercapnia, activating them has little effect on respiration. However, deletion of all Vglut2 expressing neurons in the PBel region suppresses both the respiratory and arousal response to high CO2. We identified a second population of non-CGRP neurons adjacent to the PBelCGRP group in the central lateral, lateral crescent and Kölliker-Fuse parabrachial subnuclei that are also activated by CO2 and project to the motor and premotor neurons that innvervate respiratory sites in the medulla and spinal cord. We hypothesize that these neurons may in part mediate the respiratory response to CO2 and that they may express the transcription factor, Fork head Box protein 2 (FoxP2), which has recently been found in this region. To test this, we examined the role of the PBFoxP2 neurons in respiration and arousal response to CO2, and found that they show cFos expression in response to CO2 exposure as well as increased intracellular calcium activity during spontaneous sleep-wake and exposure to CO2. We also found that optogenetically photo-activating PBFoxP2 neurons increases respiration and that photo-inhibition using archaerhodopsin T (ArchT) reduced the respiratory response to CO2 stimulation without preventing awakening. Our results indicate that PBFoxP2 neurons play an important role in the respiratory response to CO2 exposure during NREM sleep, and indicate that other pathways that also contribute to the response cannot compensate for the loss of the PBFoxP2 neurons. Our findings suggest that augmentation of the PBFoxP2 response to CO2 in patients with sleep apnea in combination with inhibition of the PBelCGRP neurons may avoid hypoventilation and minimize EEG arousals.