Melatonin is produced over the night in a process driven by the circadian clock that resides in the suprachiasmatic nuclei (SCN), and by ambient light. It is a time cue to tune the sleep-wake and other circadian rhythms with the day-night cycles and thus useful in circadian rhythm sleep disorders. In addition melatonin induces fatigue and concurrent sleep-like changes in brain activation patterns in humans. With age SCN activity and melatonin production capacity decline thus depriving the brain of an important regulator of the body’s circadian rhythms. Melatonin substitution therapy with a prolonged-release formulation that mimics the physiological release profile of the hormone (PRM) may effectively treat insomnia in older patients. Large-scale, randomized, placebo-controlled clinical trials in insomnia patients aged 55 years and older indicated that PRM given for 3 weeks or more improved sleep quality, facilitated sleep onset and improved morning alertness, daytime functioning and quality of life and reduced hypnotic drug usage. Preliminary results of a 6-months long term placebo controlled study announced at the 2009 meeting of the Associated Professional Sleep Societies indicated that PRM efficacy was sustained. There were no main safety concerns and in particular, none of the risks associated with hypnotic drugs use (e.g. memory and cognitive impairments, falls and accidents, residual daytime or ‘hangover' effects, rebound insomnia and withdrawal symptoms). There is clinical data showing efficacy of PRM in circadian rhythm sleep disorders in totally blind individuals and children with neurodevelopmental disabilities. PRM thus represents a new therapeutic principle for treating sleep disorders.