The brain is a prediction machine. Yet the world is never entirely predictable, for any animal. Unexpected events are surprising and this typically evokes prediction error signatures in animal brains. In humans such mismatched expectations are often associated with an emotional response as well. Appropriate emotional responses are understood to be important for memory consolidation, suggesting that valence cues more generally constitute an ancient mechanism designed to potently refine and generalize internal models of the world and thereby minimize prediction errors. On the other hand, abolishing error detection and surprise entirely is probably also maladaptive, as this might undermine the very mechanism that brains use to become better prediction machines. This paradoxical view of brain functions as an ongoing tug-of-war between prediction and surprise suggests a compelling new way to study and understand the evolution of consciousness in animals. I will present approaches to studying attention and prediction in the tiny brain of the fruit fly, Drosophila melanogaster. I will discuss how an ‘active’ sleep stage (termed rapid eye movement – REM – sleep in mammals) may have evolved in the first animal brains as a mechanism for optimizing prediction in motile creatures confronted with constantly changing environments. A role for REM sleep in emotional regulation could thus be better understood as an ancient sleep function that evolved alongside selective attention to maintain an adaptive balance between prediction and surprise. This view of active sleep has some interesting implications for the evolution of subjective awareness and consciousness.