Previous research supports the efficacy of cognitive-behavioral therapy for insomnia (CBT-I) in patients with comorbid psychiatric diagnoses; however, questions remain about the effectiveness of CBT-I due to the fact that previous studies excluded patients with significant psychiatric symptoms and comorbid diagnoses. This study begins to address this gap in the insomnia literature by testing a five-session CBT-I intervention in a diverse sample of patients receiving mental health treatment in an outpatient psychiatry clinic (N=23) who continue to experience chronic insomnia despite receiving pharmacological treatment for sleep. Participants were randomized to CBT-I (n=13) or a treatment as usual control group (n=10). Following one week of baseline sleep diary assessment, those in the CBT-I group completed five sessions of individual treatment; three in-person and two by phone. Those in the treatment as usual group continued with medication treatment as prescribed by their psychiatrist for a five-week period and were then given the opportunity to cross over to receive CBT-I. Study results show that adding a brief CBT-I intervention to usual care led to significant improvements in sleep compared to treatment as usual. Effect sizes were generally large, illustrating the potency of CBT-I in a psychiatric sample. Sleep gains were largely maintained at two-month follow-up. No significant changes in depression or anxiety severity were seen in the CBT-I group, suggesting that sleep interventions alone may not have the same impact in a psychiatric population with more severe and chronic mental health symptoms. Quality of life in the area of social functioning was improved following CBT-I compared to treatment as usual; however, this gain was not maintained at two-month follow-up. Finally, CBT-I was not associated with a reduction in use of sleep medication. This may reflect this sample's high level of chronicity of insomnia or a propensity towards medication dependency. In sum, the findings of this study suggest that selected patients with complex and chronic psychiatric conditions can obtain sleep improvements with CBT-I beyond those obtained with pharmacotherapy alone. Future research should focus on identifying factors that predict which “real-world” psychiatric patients are most likely to undergo and benefit from CBT-I.