The water pressure in my house fluctuates wildly. At night it goes up to 160 PSI with spikes to 170 PSI in the morning, after running the water to release the pressure it will go down to 40 PSI. Any idea what's going on?

Background info: My water heater went out and I had a friend replace it. He hadn't yet hooked up the T/P valve to the drain but I turned it on anyway not expecting any trouble on an brand new heater. The next morning I sloshed through the basement and found that the t/p valve was leaking. I got a replacement t/p valve but that didn't solve it (although its now hooked to the drain so I do not have flooding). Then is discovered that the t/p valve was leaking even when the tank was off and cool, so I checked the house water pressure and sure enough it was very high, 160 PSI. I messed with the water pressure regulator but it seemed to have no impact. Finally I turned off the water, depressurized and screwed the water pressure valve all the way out, that stopped the water. When I turned it back on I was able to carefully adjust it back to 50 PSI. But in about an hour it had spiked back up to 160 PSI. I reset it, this time to 40 PSI, but by bedtime it was back to 160 PSI. In the morning my wife complained that the water pressure was low in the shower, which surprised me with how high the pressure had been, so I checked it and the pressure was under 40 PSI. That continued that morning but by evening the pressure was back to 160 PSI with its overnight high point at 170 PSI. This morning it was still high so I ran the water for a while and now the pressure has returned to 40 PSI. Any help would be appreciated. BTW, we live on a hill with the city water main quite a way below us.

The PRV is defective and allowing seepage to increase the static pressure. When you open a faucet the PRV reverts to its set pressure, which is apparently quite low. Replace the PRV.

If it is a Wilkins or Watts, You can save 30 to 40 bucks by rebuilding the PRV with a kit if it is 3/4"...1" or larger will cost more.

I agree if you don't have a backflow preventer on your incoming line and just a pressure reducing valve I would replace that valve many of the old valves did not have a blowback feature or yours may be malfunctioning. This allows for the higher pressures associated with heating water to push back into the city line. In extreme cases I have also had to install an expansion tank on the cold water line into the water heater. If you do have a backflow preventer then you need an expansion tank.

You probably need to add an expansion tank.

If you already have an expansion tank, the pre-charge air may have leaked out.