Summary In the past few years it has become increasingly clear that insomnia is a chronic disease that interacts with many other medical conditions. As our ability to examine complex physiological activity during sleep has increased, additional evidence continues to suggest that insomnia is associated with inappropriate physiological arousal. It is now known that patients with primary insomnia have increased high-frequency EEG activation, abnormal hormone secretion, increased whole body and brain metabolic activation, and elevated heart rate and sympathetic nervous system activation during sleep. This activation can be measured throughout the day and night and is chronic. Other research suggests that insomnia, probably based upon the associated chronic physiologic arousal, is associated with increased risk for medical disorders such as depression, hypertension, or cardiac disease. An animal model that has used odor stress to produce poor sleep in rats has identified specific activated brain sites similar to those found in human brain metabolic studies to suggest that insomnia is a state in which sleep and arousal systems are both simultaneously active. The animal studies have also shown that the inappropriate arousal can be blocked by lesions in the limbic and arousal systems. It is hoped that these findings can be extended to identify new compounds that improve insomnia by acting at these sites of abnormal brain activation.