Approximately one half of patients with insomnia have a primary psychiatric disorder such as a depression or anxiety. Insomnia is associated with increased risk of new or recurrent psychiatric disorders, increased daytime sleepiness with consequent cognitive impairment, poorer prognoses, reduced quality of life and high healthcare-related financial burden. Emerging data suggest that resolution of insomnia may improve psychiatric outcomes, which underscores the importance of vigorous treatment. Unfortunately, only a small percentage of patients receive such care. An ideal monotherapeutic strategy would treat both depression and insomnia. There are, however, only a handful of modern antidepressants that objectively improve sleep maintenance problems, and none do so without causing adverse next-day effects such as sedation. Thus, a significant number of patients must take adjunctive hypnotic medications, even though longer-term efficacy has not been established. New and emerging anti-insomnia agents may prove useful in the long-term treatment of chronic insomnia. Further research is needed to establish the benefits of such treatment.