ABSTRACT Aims To test the efficacy of a cognitive–behavioural approach to treating disturbed sleep in abstinent alcoholics. Design Sixty recovering alcoholics with insomnia were assigned randomly to individual therapy, self-help with telephone support or waiting-list control. Setting Participants were volunteers recruited from out-patient treatment programs and through the media. Measurements Outcomes were assessed at post-treatment, 3-month and 6-month follow-ups using sleep diaries, the Pittsburgh Sleep Quality Index, wrist actigraphs and time-line follow-back interviews. Intervention Five sessions of out-patient cognitive–behavioural therapy for insomnia or a self-help manual with five telephone support calls. Treatment duration was 7 weeks. Findings Treated participants were significantly more improved than control participants on diary measures of sleep quality, sleep efficiency, awakenings and time to fall asleep. No significant differences between the individual therapy and self-help treatment conditions on measures of insomnia severity were evident at post-treatment. Self-reported improvement in sleep was corroborated by clinician and spousal ratings of insomnia severity, but not by actigraph recordings of nocturnal activity. At 3- and 6-month follow-up assessments treatment gains were reasonably maintained in both treatment groups, although individual therapy was associated with a higher rate of clinically significant improvement. At the 6-month follow-up, 60% participants who were regular users of sedative medication at baseline discontinued the use of their medication. Treatment appeared to have little impact in preventing relapses to alcohol. Conclusions Recovering alcoholics with insomnia can achieve better sleep by applying cognitive–behavioural strategies.