There is growing interest in insomnia both from the perspective of recent advances in clinical management as well as research aimed at elucidating its pathophysiology. This theoretical overview of insomnia describes the negative impact, etiological considerations, and pharmacological and behavioral treatments for the disorder, with an emphasis on areas receiving increased research attention. Insomnia, the most prevalent sleep disorder, affects 10–15% of the general population. In population-based studies severe insomnia has been shown to last for a median of 4 years. In addition, insomnia has a significant negative impact on an individual's work, physical, and social performance as well as overall quality of life. Furthermore, the economic cost of insomnia related to lost productivity, work-related accidents, absenteeism, and health-care costs are enormous. There is increasing evidence linking the precipitation of insomnia to stress, and converging evidence from cognitive, endocrine, neurological, and behavioral domains provide clear evidence for hyperarousal in insomnia. However, there remains no consensus regarding the specific etiological mechanisms of this disorder. Although the pathophysiology of primary insomnia remains an enigma, numerous treatments both pharmacological and behavioral have been developed and found to be efficacious in controlled studies. Despite the wide availability of pharmacological treatments and increased knowledge of behavioral interventions, the vast majority of individuals with insomnia do not appear to be receiving adequate treatment. The inadequate treatment of insomnia leads to several important and under-recognized consequences including subsequent development of psychiatric disease and increased substance use. Depression and Anxiety 18:163–176, 2003. © 2003 Wiley-Liss, Inc.