Sleep disturbances occur more often in the elderly than in patients in any other age category. Traditional treatment regimens for insomnia in older patients have emphasized benzodiazepines. The useful anxiolytic and hypnotic properties of these agents have made them the most widely prescribed class of drugs in the world. Concern has been expressed however about the significant side effect profile associated with these agents. There is now considerable evidence that all benzodiazepines show significant dose-dependent impaired daytime performance on a variety of memory, cognitive and psychomotor tests. In addition, the risk of falls, hip fractures, and traffic accidents is significantly increased in patients who are treated with benzodiazepines. There is little evidence that benzodiazepine hypnotics are still effective after chronic use. On the other hand, several impairments persist when using these hypnotics over long time. Recently, the nonbenzodiazepine drugs zolpidem and zaleplon have been introduced and are claimed to be relatively safe (i.e. less daytime sedation) when compared to benzodiazepines. Zopiclone, a non-benzodiazepine hypnotic, shows no advantages over benzodiazepines with respect to daytime performance. Several factors may interact with the effects of hypnotics on daytime functioning, including normal cognitive decline during aging, the effects of insomnia itself on daytime functioning, the presence or absence of co-morbid disorders, and pharmacokinetic changes accompanying aging. The impact of hypnotics on daytime performance further depends on various drug-related factors including the administered dose, half-life, time between intake and performance, duration of treatment, gender, and individual differences. In contrast, zolpidem and zaleplon do not significantly impair daytime performance when administered at bedtime at the recommended dose. Although further studies of drug effects in elderly insomniacs are necessary, the available evidence suggests that these short acting and relatively safer non-benzodiazepine hypnotics are a preferred alternative therapy for treating insomnia in the elderly.