Sleep-related disorders are common in patients with chronic obstructive pulmonary disease (COPD) and, possibily, other lung disorders. Exercise has been shown to improve sleep disturbances. In patients with COPD, pulmonary rehabilitation (PR) produces important health benefits with improvement in symptoms, exercise tolerance, and quality of life. However, the effect of PR on sleep quality remains unknown. The aim of this observational study was to evaluate sleep quality in patients with chronic lung disease and the role of PR as a non-pharmacologic treatment to improve sleep. Sixty-four patients with chronic lung disease enrolled in an 8-week comprehensive PR program, and completed the study (48% male; obstructive [72%], restrictive [20%], mixed [8%]; 44% on supplemental oxygen). Baseline spirometry [mean (SD)]: FEV1% pred = 48.9 (17.4), FVC% pred = 72.5 (18.1), and FEV1/FVC% = 53.1 (18.9). Exercise tolerance and questionnaires related to symptoms, health-related quality of life (HRQL), and sleep quality using the Pittsburgh Sleep Quality Index (PSQI) were obtained before and after PR. 58% reported poor sleep quality (PSQI > 5) at baseline. Sleep quality improved by 19% (p = 0.017) after PR, along with significant improvements in dyspnea, exercise tolerance, self-efficacy, and HRQL. Sleep quality in patients with chronic lung disease was poor. In addition to expected improvements in symptoms, exercise tolerance, and HRQL after PR, the subgroup of patients with COPD had a significant improvement in sleep quality. These findings suggest that PR may be an effective, non-pharmacologic treatment option for sleep problems in patients with COPD.