This study aimed to examine the prevalence and trajectory of sleep disturbances and their associated risk factors in children up to 24 months following a traumatic brain injury (TBI). In addition, the longitudinal association between sleep disturbances and children's functional outcomes was assessed. This was a prospective study of a cohort of children with TBI and a comparison cohort of children with orthopedic injury (OI). Parental reports of pre-injury sleep disturbances were compared to reports of post-injury changes at 3, 12, and 24 months. Risk factors for sleep disturbances were examined, including severity of TBI, presence of psychosocial problems, and pain. Sleep disturbances were also examined as a predictor of children's functional outcomes in the areas of adaptive behavior skills and activity participation. Both cohorts (children with TBI and OI) displayed increased sleep disturbances after injury. However, children with TBI experienced higher severity and more prolonged duration of sleep disturbances compared to children with OI. Risk factors for disturbed sleep included mild TBI, psychosocial problems, and frequent pain. Sleep disturbances emerged as significant predictors of poorer functional outcomes in children with moderate or severe TBI. Children with TBI experienced persistent sleep disturbances over 24 months. Findings suggest a potential negative impact of disturbed sleep on children's functional outcomes, highlighting the need for further research on sleep in children with TBI.