One of the complications of menopause is sleep disorders, which affect women's health. Ocimum basilicum contains compounds that may affect sleep. The aim of this study was to determine the effect of an oral capsule of O. basilicum leaf extract on sleep quality and the severity of insomnia in menopausal women. This triple-blind, randomized clinical trial study was performed on 60 Iranian menopausal women aged 40 to 65 years. Subjects were randomly assigned into two groups of intervention (each capsule containing 250 mg of O. basilicum extract and 250 mg Avicel) per day for 1 month and placebo. The Pittsburgh Sleep Quality and Insomnia Intensity Index were used to assess sleep quality and severity of insomnia before, 2 weeks after and 1 month after the intervention. There was no statistically significant difference in the baseline variables between the intervention and placebo groups (p > .05). The total sleep quality scores in the two groups of intervention and placebo were 6.2 ± 0.3 versus 9.3 ± 0.3 (p < .001) and 3.7 ± 0.3 versus 9.1 ± 0.3 (p = .015) 2 weeks and 1 month after the intervention, respectively. The total insomnia severity scores in the two groups of intervention and placebo were 9.0 ± 0.3 versus 12.1 ± 0.3 (p < .001) and 5.6 ± 0.5 versus 11.0 ± 0.5 (p < .001) 2 weeks and 1 month after the intervention, respectively. Consumption of O. basilicum capsules improved sleep quality and insomnia in menopausal women. This study was approved (code IR.MUMS.NURSE. REC.1398.070) by the Ethic committee of Mashhad University of Medical Sciences and registered at the Iranian Registry of Clinical Trials, with the No. IRCT20200104046001N1 in January 2020.