Background: As there has been a demonstrated link between sleep disturbance and suicide, the present study investigated the relationship between self-reported sleep disturbance during inpatient psychiatric treatment and clinical outcomes at discharge and six months post-discharge. Methods: Participants were 2,970 adults receiving care in a long-term inpatient psychiatric hospital. Greater than 90% of inpatients reported at least mild sleep disturbance throughout treatment. Group-based trajectory modeling was used to determine patterns of sleep disturbance changes over time. Results: Participants fit into distinct categories based on their trajectories of sleep problems across treatment: No Sleep Problems (10.3% of participants, no sleep problems endorsed over the course of inpatient psychiatric treatment), Resolvers (sleep problems completely resolved over the course of inpatient psychiatric treatment; 10.6%), Non-Responders (did not respond to inpatient psychiatric treatment; 35.7%) and Responders (sleep problems decreased but did not fully resolve over the course of inpatient psychiatric treatment; 43.4%). Individuals with comorbid major depressive disorder and generalized anxiety disorder were significantly more likely to demonstrate higher rates of sleep disturbance throughout inpatient psychiatric treatment and their sleep problems did not respond to treatment as usual (Non-Responders). Further, patients in the Non-Responder group had significantly more suicidal ideation and worse clinical outcomes (higher anxiety, more disability, and lower well-being) at discharge and six months post-discharge, as well as were on more medication including hypnotics throughout treatment. Conclusions: Findings indicate the urgent need to design and implement inpatient psychiatry sleep protocols to not only improve sleep and clinical outcomes, but also reduce the risk for suicide post-discharge.