Subjective tinnitus is a phantom auditory perception in the absence of an actual acoustic stimulus that affects 15% of the global population. In humans, tinnitus is often associated with disturbed sleep and, interestingly, there is an overlap between the brain areas involved in tinnitus and regulation of NREM sleep. We used eight adult ferrets exposed to mild noise trauma as an animal model of tinnitus. We assessed the phantom percept using two operant paradigms sensitive to tinnitus, silent gap detection and silence detection, before and, in a subset of animals, up to six months after the mild acoustic trauma. The integrity of the auditory brainstem was assessed over the same period using auditory brainstem response recordings. Following noise overexposure, ferrets developed lasting, frequency–specific impairments in operant behaviour and evoked brainstem activity. To explore the interaction between sleep and tinnitus, in addition to tracking the behavioural markers of noise–induced tinnitus and hearing impairment after noise overexposure, we evaluated sleep–wake architecture and spontaneous and auditory–evoked EEG activity across vigilance states. Behavioural performance and auditory–evoked activity measurements after noise overexposure suggested distinct degrees of tinnitus and hearing impairment between individuals. Animals that developed signs of tinnitus consistently developed sleep impairments, suggesting a link between the emergence of noise–induced hearing loss and/or tinnitus and sleep disruption. However, neural markers of tinnitus were reduced during sleep, suggesting that sleep may transiently mitigate tinnitus. These results reveal the importance of sleep–wake states in tinnitus and suggest that understanding the neurophysiological link between sleep and tinnitus may provide a new angle for research into the causes of phantom percepts and inform future treatments.