A system includes a master and a slave coupled via a wire pair for transmitting differential data. The master and slave are each powered by a local DC power supply. In a normal mode, a DC voltage and differential data are supplied over the same wire pair. The differential data is processed by a PHY AC-coupled to the wire pair. To enter a low power sleep mode, such as due to a temporary non-use of the system, the master interrupts the DC voltage on the wire pair, which signals to the slave to enter the sleep mode. The system is woken up by reapplying the DC voltage to the wire pair to signal to the slave to wake up. Only the DC path, and not the data path, is used for signaling the sleep mode and awake mode, so the data path can be disabled to conserve power.