Power is the limiting factor in traditional CMOS scaling and must be dealt with aggressively. With the scaling of technology and the need for high performance and more functionality, power dissipation becomes a major bottleneck for a system design. Power gating of functional units has been proved to be an effective technique to reduce power consumption. This paper describe about to design of an ALU block with sleep mode to reduce the power consumption of the circuit. Local sleep transistors are used to achieve sleep mode. During sleep mode one functional unit is working and another functional unit is in idle state. i.e., it disconnects the idle logic blocks from the power supply. Architecture and functionality of the ALU implemented on FPGA and is tested using DSCH tool. Power analysis is carried out using MICROWIND tool.