Study Objective. To measure the association of symptoms attributed to residual effects of sleep medication (e.g., drowsiness, difficulty concentrating, and impaired memory) on self-reported functioning and satisfaction with these medications. Methods. Individuals using prescription medications for insomnia were invited to complete an Internet-based survey. Respondents were compared according to the presence of self-reported residual effects; relationships between severity of these effects and outcomes were modeled using regression. Measures included the Brief Insomnia Questionnaire, Work Productivity and Activity Impairment Questionnaire, and SATMED-Q. Subgroup analyses were conducted with patients aged ≥65 years. Approximately 80% reported experiencing ≥1 residual effect. The severity of residual effects was associated with increased residual effect-related work impairment, including absenteeism (RR = 1.46, p<0.001), presenteeism (RR = 1.12, p<0.001), overall work impairment (RR = 1.13, p<0.001), and nonwork activity impairment (RR = 1.11, p<0.001). More severe residual symptoms were also associated with increased difficulty in home management (Beta = .31, p<0.001), ability to work (Beta = .31, p<0.001), social relationships, (Beta = .32, p<0.001), close personal relationships (Beta = .30, p<0.001), and lower medication satisfaction (Beta = -.37, p<0.001). Conclusions. Individuals using medications for insomnia commonly experience symptoms considered as residual effects, and these symptoms are associated with greater interference of sleep-related problems at work, at home, and with social relationships.