In contrast to the association of insomnia with mental health, its association with physical health has remained largely unexplored until recently. Based on findings that insomnia with objective short sleep duration is associated with activation of both limbs of the stress system and other indices of physiological hyperarousal, which should adversely affect physical and mental health, we have recently demonstrated that this insomnia phenotype is associated with a significant risk of cardiometabolic and neurocognitive morbidity and mortality. In contrast, insomnia with normal sleep duration is associated with sleep misperception and cognitive-emotional arousal, but not with signs of physiological hyperarousal or cardiometabolic or neurocognitive morbidity. Interestingly, both insomnia phenotypes are associated with mental health, although most likely through different pathophysiological mechanisms. We propose that objective measures of sleep duration may become part of the routine evaluation and diagnosis of insomnia, and that these two insomnia phenotypes may respond differentially to biological versus psychological treatments.