Chronic sleep difficulties commonly coexist with neurodevelopmental and psychiatric problems. Children with special needs may have a variety of sleep disturbances and of these circadian rhythm sleep disorders appear to be the most common. Melatonin supplementation for some circadian rhythm sleep disorders is often an effective treatment because it corrects the associated abnormal melatonin secretion. Melatonin has a benign safety profile and significant potential health benefits. Melatonin has many functions including sleep promoting and chronobiotic properties. Melatonin therapy is only beneficial when persistent sleep difficulties are associated with low melatonin secretion and additional supplementation beyond the therapeutic dose does not result in further sleep promotion. Abnormal neurological modulation of pineal melatonin secretion is commonly present in neurodevelopmental and psychiatric disorders. Melatonin deficiency not only leads to sleep disturbance, but also to multiple health problems. Chronic sleep difficulties of special needs children must not be ignored because they may exacerbate the deficits in development which are already present. In this review, misconceptions about sleep and melatonin therapy, functions of this indoleamine, causes and diagnoses of circadian rhythm sleep disorders, physiological principles underlying treatment, selection of candidates, dose, safety and health benefits are discussed.