Insomnia is a risk factor for new onset, exacerbation, and relapse of mental illness. The goal of this study was to examine the prevalence, severity, and predictors of insomnia in hospitalized psychiatric patients. Ninety-seven consecutive psychiatric inpatients were administered the Insomnia Severity Index (ISI) to evaluate the presence and severity of insomnia. Patients' hospital charts were reviewed for demographic and medical information. ISI scores in 79.4% of the patients reached the threshold criterion of 8 for insomnia. Insomnia was not mentioned as a clinical problem in the discharge notes problem list in any of these patients. Multivariate analysis indicated that age (p = 0.009), recent suicide attempt or ideation (P < 0.001), tobacco use (p = 0.024), and recreational drug use during the past month (p = 0.040) were significant predictors of insomnia severity. Insomnia was highly prevalent in this population. Identification and management of insomnia would be an important clinical goal in hospitalized psychiatric patients.