Purpose Considering the reports of increasing sleep problems in children, affecting health and well-being in young children and their families, we found it important to gain more knowledge about sleep and its correlation to health-related quality of life (HRQoL) in young, healthy children. The aim with this study was to describe sleep quality, sleep duration, and HRQoL in healthy 3–10-year-old children and to test associations between children’s sleep and HRQoL. Methods Parents of 160 children (average age: 6.9 years, SD ±2.2) participated in the study. Sleep onset problems (SOP), sleep maintenance problems (SMP), and sleep duration were measured by the Pediatric Insomnia Severity Index (PISI). KIDSCREEN-27 was used to measure HRQoL in five dimensions: physical well-being, psychological well-being, autonomy and parent relation, social support and peers, and school environment. Results The average score was 2.2 for SOP (SD +/-2.2) and 1.3 for SMP (SD +/-1.6). Almost all children (98%) slept between 8 and 13 hours per night. Younger children had statistically significantly more sleep problems than older children. Correlations were found between SOP and poor psychological well-being ( p < 0.05, ρ = - 0.16), and between SMP and poor psychological well-being ( p < 0.05, ρ = - 0.21), poor school environment ( p < 0.01, ρ = - 0.29), and poor social support and peers ( p < 0.05, ρ = - 0.19). Conclusion Children’s sleep associates with psychosocial well-being, school functioning and relations to peers, and need to be acknowledged in child health care settings and schools.