Recent conceptualizations implicate cognitive hyperarousal in the etiology and maintenance of insomnia and suggest that negative cognitive activity acts as mediator between personality factors and negative affect on the one hand, and insomnia complaints and poor daytime functioning on the other.  The present study examined nocturnal sleep parameters, daytime functioning and psychological adjustment in relation to nocturnal cognitive activity and experienced sleep quality, both cross sectionally ( N = 183) and longitudinally ( N = 91), in four groups of older adults: good and poor sleepers with high and low cognitive arousal. In Phase 1, the objectives were to compare the characteristics of seniors who reported sleeping well and poorly and to evaluate the role of nocturnal cognitive arousal in the complaint of poor sleep. The goals of Phase 2 were to assess changes in sleep quality over a 2-year period and to identify factors of vulnerability and resilience to the development/maintenance of insomnia components among older adults. (Abstract shortened by UMI.)