Nocturnal agitation refers to a broad spectrum of symptoms from simple movements to aggressive behaviors with partial or complete loss of awareness. An accurate identification of its etiology is critical for appropriate therapeutic intervention. In children and young adults, distinguishing between non-rapid eye movement (NREM) sleep parasomnias and psychogenic non-parasomniac manifestations, a condition known as sleep-related dissociative disorder (SRDD), can be challenging. This review aims to summarize current clinical, neurophysiological, and epidemiological knowledge on NREM parasomnia and SRDD, and to present the pathophysiological hypotheses underlying these nocturnal manifestations. Sleepwalking, sleep terror and confusional arousals are the three main presentations of NREM parasomnias and share common clinical characteristics. Parasomniac episodes generally occur 30 minutes to three hours after sleep-onset, they are usually short, lasting no more than few minutes and involve non-stereotyped, clumsy behaviors with frequent amnesia. The prevalence of NREM parasomnia decreases from 15–30% in children to 2–4% in adults. Parasomniac episodes are incomplete awakening from the deepest NREM sleep and are characterized by a dissociated brain activity, with a wake-like activation in motor and limbic structures and a preserved sleep in the fronto-parietal regions. SRDD is a less known condition characterized by dramatic, often very long episodes with frequent aggressive and potentially dangerous behaviors. SRDD episodes frequently occur in quiet wakefulness before falling asleep. These dissociative manifestations are frequently observed in the context of psychological trauma. The pathophysiology of SRDD is poorly understood but could involve transient changes in brain connectivity due to labile sleep-wake boundaries in predisposed individuals. We hypothesize that SRDD and NREM parasomnia are forms of sleep-related dissociative states favored by a sleep-wake state dissociation during sleep-onset and awakening process, respectively.