Insomnia is common, persistent, and increases the risk for relapse in alcohol-dependent (AD) patients. Abstinence has long been considered the best strategy for allowing sleep to normalize, although how many and which patients respond to abstinence is unknown. The aims of this study were to investigate the prevalence and correlates of both baseline and persistent insomnia in AD patients. The course of sleep problems in response to abstinence, moderate drinking, or relapse following treatment was also examined. A naturalistic longitudinal outcomes study interviewed 267 patients (69% male; mean age of 44 years) with DSM-IV alcohol dependence at baseline and 6 months later (84% follow-up rate). The Sleep Problems Questionnaire, Time-Line Follow-Back Interview, and Brief Symptom Inventory measured insomnia, drinking, and psychiatric symptoms, respectively. Simple correlations, logistic regression, and repeated measures analysis of variance were used to analyze the data. At baseline, 47% of patients were classified with insomnia, which was independently predicted by female gender and psychiatric severity. Both abstinence and moderate drinking outcomes significantly predicted a reduction of insomnia symptoms after controlling for gender and psychiatric severity. Among patients with baseline insomnia, however, insomnia persisted in over 60% of cases, which was predicted by baseline insomnia severity. Moreover, insomnia persisted in one-quarter of patients despite abstinence. Treatment aimed at preventing relapse to heavy drinking provides good first-line therapy for insomnia in AD patients, but some may require insomnia-specific evaluation and treatment in addition to substance-focused treatment and psychiatric care.