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Background Rates of substance use disorders (SUDs) continue to rise in the USA with parallel rises in admissions to outpatient SUD treatment programs. Insomnia symptoms reduce treatment adherence, trigger relapse, and generally undermine SUD recovery efforts. Cognitive-behavioral therapy for insomnia (CBT-I) is the first-line treatment recommended for chronic insomnia. No study has examined the effectiveness of CBT-I for individuals who recently entered an outpatient SUD treatment program embedded within a therapeutic community (i.e., long-term drug-free residential setting). Methods A randomized controlled trial conducted at a SUD program embedded in a therapeutic community aimed to compare group-based CBT-I (gCBT-I) (N = 10) with the standard of care (SOC) (N = 11) among individuals who have SUDs and comorbid insomnia. We present a RE-AIM (reach, effectiveness, adoption, implementation, and maintenance) framework evaluation to provide empirical data on gCBT-I feasibility and facilitators and barriers of conducting an insomnia-focused clinical effectiveness study within a therapeutic community. Results Participants in both study arms reported moderately severe insomnia symptoms at admission and reductions in insomnia symptoms over time. Among participants who completed the Insomnia Severity Index (ISI) beyond admission, ISI decreased to ≤ 8 (the clinical cutoff for mild insomnia) in 80% of individuals in the gCBT-I group compared with 25% of individuals in the SOC group. A RE-AIM framework evaluation showed initial success with Reach and Adoption while Implementation, and Maintenance were limited. Effectiveness was inconclusive because of challenges with recruitment, intervention integrity, and missing data that precluded meeting the planned recruitment and study aims and led to study termination. Coordination and communication with staff and leadership facilitated gCBT-I implementation, yet well-known CBT-I barriers including time- and resource-intensive sleep medicine training for interventionalists and maintenance of treatment integrity during an 8-week intervention limited gCBT-I sustainability. Conclusions This analysis supports the feasibility of conducting behavioral sleep medicine research in outpatient SUD treatment programs embedded within therapeutic communities. Implementation of an insomnia-focused intervention was widely accepted by patients and providers and has potential to address insomnia symptoms in early SUD recovery. Addressing patient- and organizational-level implementation barriers may enhance the sustainability and scalability of sleep interventions and provide new hope to effectively treat insomnia among people living with SUDs. Trial registration Clinicaltrials.gov: NCT03208855. Registered July 6, 2017https://clinicaltrials.gov/ct2/show/NCT03208855?term=NCT03208855&draw=2&rank=1