Twenty patients of interstitial lung disease (ILD) and same number of healthy adults were selected to monitor arterial hemoglobin oxygen saturation (SaO2) breathing pattern and arrhythmias during sleep. The maximum fall in SaO2 during sleep was 13.1% (10-16%) in ILD patients as compared to 4.8% (3-6%) in controls and the difference was significant (p < 0.005). The ILD patients spent 16.9% of mean total sleep time (TST) below 85% SaO2 and 0.7% of mean TST below 80% SaO2 whereas none of the healthy subjects had SaO2 below 90% during sleep. These patients had more disturbed sleep than controls. Abnormally high breathing frequency demonstrated by ILD patients while awake, was not altered during sleep. Both tidal volume (VT) and minute ventilation (Vmin) decreased by 6.6% and 11.5%, respectively in ILD patients during sleep though it was not significant (p > 0.25) statistically. The respiratory drive was declined during sleep in ILD patients. The percent of tidal volume contributed by rib cage (% RC) lessened during sleep in all the subjects. The ratio of the total excursion of the rib cage and abdomen during inspiration without considering the direction of movement, divided by tidal volume (TCD/VT) revealed asynchronous breathing in ILD patients during sleep. Arrhythmias were found in 6 (30%) of ILD patients and 4 (20%) of control subjects. Observed apnea-hypopnea did not qualify for sleep apnea syndrome in any case.