Mental disorders are the leading cause of reduced quality of life due to illness worldwide. Most patients with mental disorders report difficulties initiating or maintaining sleep (insomnia). Current guidelines recommend cognitive behavioral therapy for insomnia (CBT-I) as the first-line treatment, including for patients with comorbid mental disorders. Particularly, data on the management of insomnia in inpatient psychiatric care remain scarce. This clinical practice evaluation examined the management of insomnia in inpatient psychiatric care through two complementary approaches. The project comprised a survey on insomnia management in 80 mental health professionals and data extraction of nighttime medication from 245 inpatients. Reports from the survey indicate that 95% of mental health professionals regularly care for patients with insomnia. 56% correctly identified CBT-I and 48% incorrectly identified benzodiazepines or benzodiazepine-receptor agonists as the first-line treatment for insomnia. 65% reported that CBT-I is not or rarely offered. The main reported challenges to implementing CBT-I were limited knowledge about CBT-I, patient expectations for pharmacological treatment, and time constraints in clinical practice. Data extracted from 245 patient records indicated that 40% of the patients took benzodiazepines, 9% melatonin, 7% benzodiazepine receptor agonists, 5% clomethiazole, 4% antihistamines, and 2% phytotherapy. The results indicate that insomnia is a prevalent health problem in inpatient psychiatric care. Implementation of CBT-I or adaptations remains insufficient, and treatment with hypnotics is common. Future work is needed to further adapt and test CBT-I in inpatient psychiatric care to improve sleep and health.