The link between co-morbid insomnia and depression has been demonstrated in numerous groups. Insomnia has been associated with: (1) an increased risk of developing subsequent depression; (2) an increased duration of established depression; and (3) relapse following treatment for depression. In addition, specific insomnia symptoms, such as nocturnal awakening with difficulty resuming sleep, are more strongly associated with depression than classic symptoms of insomnia. Participants of a workshop, held at the 6th annual meeting of The International Sleep Disorders Forum: The Art of Good Sleep in 2008, evaluated whether the effective management of sleep disorders could reduce both concurrent depressive symptoms and the risk of developing subsequent depression. Following the workshop, a targeted literature review was conducted. Initial evidence demonstrated that in patients with insomnia and co-morbid depression either pharmacological treatment of insomnia or psychological treatment in the form of cognitive behavioural therapy for insomnia improved both insomnia and depressive symptoms. Although these appeared to be promising treatment strategies, however, of the 27 identified treatment studies, only one large well-designed randomized controlled trial comparing the efficacy of eszopiclone plus fluoxetine with placebo plus fluoxetine demonstrated unequivocal evidence that improvements in insomnia symptoms conferred additive benefits on depressive outcomes. In addition, it was unclear whether any differences exist in efficacy between sedating versus non-sedating pharmacotherapies for insomnia in this patient group. Further studies of sufficient sample size and duration are needed to evaluate combinations of pharmacological (either sedating or non-sedating) and psychological interventions in co-morbid insomnia and depression. This article reviews the level of evidence, recommendations and areas of particular interest for further study and discussion arising from this workshop.