1. The circadian timing system has been implicated in age-related changes in sleep structure, timing and consolidation in humans. 2. We investigated the circadian regulation of sleep in 13 older men and women and 11 young men by forced desynchrony of polysomnographically recorded sleep episodes (total, 482; 9 h 20 min each) and the circadian rhythms of plasma melatonin and core body temperature. 3. Stage 4 sleep was reduced in older people. Overall levels of rapid eye movement (REM) sleep were not significantly affected by age. The latencies to REM sleep were shorter in older people when sleep coincided with the melatonin rhythm. REM sleep was increased in the first quarter of the sleep episode and the increase of REM sleep in the course of sleep was diminished in older people. 4. Sleep propensity co-varied with the circadian rhythms of body temperature and plasma melatonin in both age groups. Sleep latencies were longest just before the onset of melatonin secretion and short sleep latencies were observed close to the temperature nadir. In older people sleep latencies were longer close to the crest of the melatonin rhythm. 5. In older people sleep duration was reduced at all circadian phases and sleep consolidation deteriorated more rapidly during the course of sleep, especially when the second half of the sleep episode occurred after the crest of the melatonin rhythm. 6. The data demonstrate age-related decrements in sleep consolidation and increased susceptibility to circadian phase misalignment in older people. These changes, and the associated internal phase advance of the propensity to awaken from sleep, appear to be related to the interaction between a reduction in the homeostatic drive for sleep and a reduced strength of the circadian signal promoting sleep in the early morning.