Insomnia is an extremely common symptom both de novo and in the context of other medical and psychiatric disorders. The impact of insomnia is often ignored both by the individual and by society in terms of its clinical and socioeconomic ramifications. Insomnia is therefore under-appreciated and almost certainly under-treated, thus making it a serious health concern. It is estimated that more than 60 million Americans suffer from insomnia annually, and this figure is expected to grow to 100 million by the middle of the 21st century. Whether it be difficulty initiating or maintaining sleep, the disruption of nocturnal sleep will invariably impact on daytime activities and often results in daytime fatigue, performance deficits (including memory and other cognitive deficits), an increase in the number of sick days taken by an individual and accidents (some catastrophic). This review examines the costs directly related to insomnia in various sectors of healthcare, the indirect costs associated with accidents, sick days and decreased work productivity, and related costs resulting from insomnia but which meet neither the criteria of direct nor indirect cost categories. The total direct, indirect and related costs of insomnia are conservatively estimated at $US30 to 35 billion annually in the US (1994 dollars). Economic gains can be made by treating patients on an outpatient basis in sleep centres.