We present a method based on the two-process model of sleep regulation for developing individualized biomathematical models that predict performance impairment for individuals subjected to total sleep loss. This new method advances our previous work in two important ways. First, it enables model customization to start as soon as the first performance measurement from an individual becomes available. This was achieved by optimally combining the performance information obtained from the individual's performance measurements with a priori performance information using a Bayesian framework, while retaining the strategy of transforming the nonlinear optimization problem of finding the optimal estimates of the two-process model parameters into a series of linear optimization problems. Second, by taking advantage of the linear representation of the two-process model, this new method enables the analytical computation of statistically based measures of reliability for the model predictions in the form of prediction intervals. Two distinct data sets were used to evaluate the proposed method. Results using simulated data with superimposed white Gaussian noise showed that the new method yielded 50% to 90% improvement in parameter-estimate accuracy over the previous method. Moreover, the accuracy of the analytically computed prediction intervals was validated through Monte Carlo simulations. Results for subjects representing three sleep-loss phenotypes who participated in a laboratory study (82 h of total sleep loss) indicated that the proposed method yielded individualized predictions that were up to 43% more accurate than group-average prediction models and, on average, 10% more accurate than individualized predictions based on our previous method.