Both patients with narcolepsy and insomnia frequently present clinically with nocturnal sleep disrupted by disturbing dreams. Polysomnographic correlates of these reports are unclear. In this study, 24 patients with psychophysiological insomnia and 16 patients with narcolepsy were compared on selected polysomnographic and self-reported typical dream characteristics. As a group, patients with narcolepsy showed more frightening, recurrent dreams and shorter rapid eye movement (REM) segments when compared with patients with insomnia. However, within the narcolepsy group, there were few correlations between typical dream characteristics and any measure of REM segment length or REM density. In the insomnia group, shorter REM segments and higher REM density were related to typically more vivid, frightening, and disrupted dreaming. We speculate that the mechanisms of disturbed dream recall may be different in insomnia and narcolepsy.