The association between psychopathology and poor sleep has long been recognized. The current review focuses on the association between the most prevalent sleep disorders (insomnia, sleep-related breathing disorders and restless legs syndrome) and four major psychiatric disorders: alcohol dependence, schizophrenia, depression and anxiety disorders. Decreased total sleep time and increased sleep onset latency as measured by polysomnography as well an increase of the prevalence of insomnia has been reported in all of these psychiatric disorders. Furthermore, sleep disturbance is a risk factor for their development. Cognitive-behavioral therapy for insomnia has been shown to have a positive impact on both sleep and symptoms of depression and anxiety. Whether adequate treatment of sleep disorders can prevent the incidence of psychiatric disorders, remains to be investigated.