The purposes of this systematic/critical review are: 1) to identify studies on the effects of exercise on chronic insomnia and sleep complaints in middle-aged and older adults and to compare the results of exercise with those obtained with hypnotic medications and 2) to discuss potential mechanisms by which exercise could promote sleep in insomniac patients. We identified studies from 1983 through 2011 using MEDLINE, SCOPUS and Web of Science. For systematic analyses, only studies assessing the chronic effects of exercise on sleep in people with sleep complaints or chronic insomnia were considered. We used the following keywords when searching for articles: insomnia, sleep, sleep complaints, exercise and physical activity. For a critical review, studies were selected on the effects of exercise and possible mechanisms that may explain the effects of exercise on insomnia. We identified five studies that met our inclusion criteria for systematic review. Exercise training is effective at decreasing sleep complaints and insomnia. Aerobic exercise has been more extensively studied, and its effects are similar to those observed after hypnotic medication use. Mechanisms are proposed to explain the effects of exercise on insomnia. There is additional documented evidence on the antidepressant and anti-anxiety effects of exercise. Exercise is effective to decrease sleep complaints and to treat chronic insomnia. Exercise presented similar results when compared with hypnotics; however, prospective studies comparing the effects of exercise with medical and non-medical treatments are warranted before including exercise as a first-line treatment for chronic insomnia are necessary.