The effect of chronic illness on the subjective quality of sleep, and the use of hypnotics was studied in a stratified random sample of elderly people. Six hundred subjects aged 65 years or over were included in the study. A structured interview on the quality of sleep and medical history was carried out. In addition, the majority of diagnoses were confirmed from the national health insurance documents of the subjects. Logistic regression analysis disclosed that only perceived poor health and peptic ulcer or esophagitis were associated with perceived poor sleep. Age did not contribute to the quality of sleep. Age over 80 years and the presence of peptic ulcer or esophagitis, heart failure, cholelithiasis, and, in particular, depression were associated with the habitual use of hypnotics. The results stress the importance of perceived poor general health status, and acid-related gastrointestinal diseases as the determinants of subjective poor sleep, rather than age or many specific somatic diseases as such. On the other hand, depression is a major determinant for the habitual use of hypnotics.