The objective of this review is to highlight the impact of insomnia in central neurological disorders by providing information on its prevalence and give recommendations for diagnosis and treatment. Insomnia in neurological disorders is a frequent, but underestimated symptom. Its occurrence may be a direct consequence of the disease itself or may be secondary to pain, depression, other sleep disorders or the effects of medications. Insomnia can have a significant impact on the patient's cognitive and physical function and may be associated with psychological distress and depression. Diagnosis of insomnia is primarily based on medical history and validated questionnaires. Actigraphy is a helpful diagnostic tool for assessing the circadian sleep-wake rhythm. For differential diagnosis and to measure the duration of sleep full polysomnography may be recommended. Prior to initiating treatment the cause of insomnia must be clearly identified. First line treatment aims at the underlying neurologic disease. The few high quality treatment studies show that short term treatment with hypnotics may be recommended in most disorders after having ruled out high risk for adverse effects. Sedating antidepressants may be an effective treatment for insomnia in stroke and Parkinson's disease (PD) patients. Melatonin and light treatment can stabilize the sleep-wake circadian rhythm and shorten sleep latency in dementias and PD. Cognitive behavioral therapy (CBT) can be effective in treating insomnia symptoms associated with most of the central neurological diseases. The prevalence and treatment of insomnia in neurological diseases still need to be studied in larger patient groups with randomized clinical trials to a) better understand their impact and causal relationship and b) to develop and improve specific evidence-based treatment strategies.