A substantial number of women experience sleep difficulties in the approach to menopause and beyond, with 26% experiencing severe symptoms that impact daytime functioning, qualifying them for a diagnosis of insomnia. Here, we review both self-report and polysomnographic evidence for sleep difficulties in the context of the menopausal transition, considering severity of sleep complaints and links between hot flashes (HFs) and depression with poor sleep. Longitudinal population-based studies show that sleep difficulties are uniquely linked with menopausal stage and changes in follicle-stimulating hormone and estradiol, over and above the effects of age. A major contributor to sleep complaints in the context of the menopausal transition is HFs, and many, although not all, HFs are linked with polysomnographic-defined awakenings, with HF-associated wake time contributing significantly to overall wakefulness after sleep onset. Some sleep complaints may be comorbid with depressive disorders or attributed to sleep-related breathing or movement disorders, which increase in prevalence especially after menopause, and for some women, menopause, age, and environmental/behavioral factors may interact to disrupt sleep. Considering the unique and multifactorial basis for sleep difficulties in women transitioning menopause, we describe clinical assessment approaches and management options, including combination treatments, ranging from cognitive behavioral therapy for insomnia to hormonal and nonhormonal pharmacological options. Emerging studies suggest that the impact of severe insomnia symptoms could extend beyond immediate health care usage and quality of life issues to long-term mental and physical health, if left untreated in midlife women. Appropriate treatment, therefore, has immediate benefit as well as advantages for maintaining optimal health in the postmenopausal years.