The majority of people with serious mental illness experience insomnia, and insomnia is one of the most frequent reasons for mental health referrals in the Veterans Health Administration. Insomnia also represents a critical obstacle to mental health recovery. Little is known about how military veterans with mental health problems conceptualize their sleep and sleep problems; such information may uncover new avenues for research and treatment. Therefore, the purpose of this study was to explore how veterans with serious mental illness and insomnia experience and understand their sleep, towards the aim of identifying these new avenues. Participants included 20 veterans with insomnia and serious mental illness (i.e. schizophrenia spectrum, bipolar or major depressive disorders, with serious functional impairments). Data were collected via an inductive phenomenological approach using semi‐structured interviews. We identified five themes: Sleep to Recharge; Sleep as a Fight; Sleep as Safety or Escape; Sleep as Dangerous; and Military Influence. Participants' relationship with sleep was complex; many associated it with intrusive and troubling hallucinations, paranoia and military experiences, yet at the same time desired sleep for its potential to liberate them from distress. Military mindsets both helped and hindered sleep. These results extend existing models of insomnia development and maintenance, and illuminate phenomena previously unidentified in this underserved veteran population. Clinical and theoretical implications are discussed, as well as new research directions for enhancing therapeutic efficacy.