Disruptions in sleep have long been part of our diagnostic criteria for a variety of psychological disorders. However, only recently have researchers begun to examine the complex interactions between sleep and specific pathology. Sleep is an energetic resource (Zohar, Tzischinsky, Epstein, & Lavie, 2005) that is thought to have enabled our evolutionary ancestors to preserve energy, avoid nighttime predation, maximize learning from ontogenic contingencies, and ultimately survive and reproduce (Rechtstaffen, 1998). Deprivation of this energetic resource results in an array of detrimental biopsychosocial consequences (Orzel-Gryglewska, 2010). At the biochemical level, sleep disruption alters the normal sleep-induced surge of ATP needed for biosynthesis in the brain (Dworak, McCarley, Kim, Kalinchuck & Basheer, 2010) and triggers patterns of altered immune activation (Orzel-Gryglewska, 2010). At the psychological level, persons deprived of sleep report increased pain and discomfort (Lentz, Landis, Rothermel & Shaver, 1999), evidence mood dysregulation (Walker & van Der Helm, 2009) and exhibit neurocognitive impairments in attention and memory (Durmer & Dinges, 2005). Therefore, disruptions in sleep lead to considerable biological and psychological dysfunction. Sleep disruption is a significant challenge to individuals suffering from posttraumatic stress disorder (PTSD), a disorder marked by exposure to trauma and subsequent re-experiencing of the traumatic event, heightened arousal, and avoidance of trauma-related stimuli (American Psychiatric Association, 2000; Lamarche and De Koninck, 2007). This is reflected in the diagnostic criteria such that nightmares are included as a symptom of reexperiencing and insomnia is reflected in the hyperarousal cluster. Additionally, a high prevalence of sleep problems are reported among persons exposed to an array of traumatic experiences including sexual abuse (Steine et al., 2011), motor vehicle accidents (Kobayashi et al., 2008), political violence (Palmieri, Chipman, Canetti, Johnson & Hobfoll, 2010), and war (Peterson, Goodie, Satterfield & Brim, 2008). Given the high prevalence of these sleep problems among traumatized populations, some have argued that sleep disturbance is a core feature of PTSD (Spoormaker & Montgomery, 2008; Ross, Ball, Sullivan & Caroff, 1989). Sleep problems tend to evoke and exacerbate general discomfort and dysphoria (Lentz, Landis, Rothermel & Shaver, 1999; Walker & Van de Helm, 2009), suggesting that negative emotionality in PTSD and other psychological disorders is amplified in the absence of sleep. Individuals with PTSD also report greater fear and anxiety about sleeping due to trauma related nightmares, exhibit conditioned avoidance of sleep and sleep related stimuli, and report higher levels of substance use which interfere with sleep (Lamarche and De Koninck, 2007). In addition to behavioral manifestations of sleep problems, individuals with PTSD demonstrate differences in their sleep architecture (Kobayahsi, Boarts, Delahanty, 2007) which may interfere with normal processes of fear extinction such that habituation to feared stimuli is not retained in memory (Mellman, Pigeon, Nowell & Nolan, 2007; Spoormaker et al., 2010). What is less clear is the critical question of causality, whether sleep disruption is exacerbating PTSD symptoms or vice versa. Despite clinical and epidemiological evidence linking sleep problems to PTSD, only a few longitudinal studies have evaluated the relationship between sleep problems and PTSD over time (Babson & Feldner, 2010; Kobayashi et al., 2008; Mellman, Bustamente, Fins, Pigeon & Nolan, 2002; Steine et al., 2011; Wright et al., 2011). In a small study of patients admitted to the hospital for traumatic injuries related to motor vehicle accidents, industrial accidents, and gunshots, fragmented REM sleep predicted PTSD six weeks later (Mellman et al., 2002). Conversely, a study of motor vehicle accident survivors found that PTSD and nightmares were shown to predict later sleep problems (Kobayashi et al., 2008). In a two-wave study of U.S. veterans, initial insomnia was significantly associated with increased PTSD and depression eight months later, but PTSD and depression were not associated with later insomnia (Wright et al. 2011). Thus, the literature remains mixed whether sleep problems lead to later psychological problems or whether psychological problems lead to later sleep difficulties. We attempt to help answer this question in the current study. In the current study, the longitudinal relationships between sleep and PTSD, depression, and intrapersonal resource loss were investigated in a large national random sample of adults living in the Palestinian Authority during 2008. Since the start of the Al Aqsa Intifada, or Second Intifada, in September 2000, to the time of the current study, thousands of Palestinians have been killed in acts of political violence (B'Tselem, 2012). The Israeli-Palestinian conflict occurring during 2008 was greatest during Israel's “Operation Hot Winter” in the early months of that year. Although a truce between Israel and the Palestinian Authority was reached on June 19, 2008 and lasted until December, it is estimated that 455 Palestinians were killed by Israeli forces in the period from January 1 through December 26, 2008 (B'Tselem, 2008). There was also active violence between Palestinian factions during this time. Previous studies demonstrated that ongoing political violence in this region is a source of significant posttraumatic stress and resource loss (Canetti, Galea, Hall, Johnson, Palmieri, & Hobfoll, 2010; Gelkopf, Berger, Bleich, & Silver, 2012; Heath, Hall, Russ, Canetti, & Hobfoll, 2012; Hobfoll, Hall, & Canetti, 2012; Hobfoll, Mancini, Hall, Canetti & Bonanno, 2012). Prior cross-sectional work conducted in neighboring Israel indicated that political violence is a source of markedly high levels of sleep disturbance and psychological distress (Palmieri et al., 2010). The current study extends this work by examining the relationship between sleep problems, each of the PTSD symptom clusters, depression, and intrapersonal resource loss using a more powerful prospective design. Based on the literature that sleep serves multiple core survival functions, sleep problems were conceptualized as a loss of an energetic resource (Zohar et al., 2005) which broadly impairs the ability to cope with ongoing adversity and trauma (Hobfoll & Lilly, 1993; Hobfoll, 2002). That is, if individuals’ sleep patterns are markedly disrupted, they are expected to have less energy to deal with problems and cope; this in turn may contribute to the loss of intrapersonal resources such as feelings of self-efficacy. As such, the first hypothesis was that sleep problems would have a broad impact on psychological distress, predicting increased symptoms of re-experiencing, avoidance, and hyperarousal, depression, and intrapersonal resource loss. It is also possible that sleep problems may worsen as a function of earlier PTSD. For instance, individuals may become increasingly anxious and agitated as PTSD transitions to a chronic phase. As emotion regulation resources erode, individuals may struggle to manage symptoms, become increasingly hyperaroused, and evince greater sleep problems. As such, the second hypothesis was that psychological distress would predict later sleep problems. Thus, a reciprocal process in which sleep problems predict greater distress, and greater distress predicts later sleep problems was anticipated. An initial cross-panel model included overall PTSD and sleep problems, nightmares, and depression. A second cross-panel model included PTSD symptom clusters, depression, intrapersonal resource loss, sleep problems, and nightmares.