STUDY OBJECTIVES: Insomnia is associated with poor health related quality of life (HRQOL) in depressed patients. Prior clinical trials of hypnotic treatment of insomnia in depressed patients have shown improvement in HRQOL, but in these studies HRQOL was relegated to a secondary outcome, and objective measures of sleep were not undertaken. DESIGN: Double-blind, randomized, placebo-controlled clinical trial. SETTING: Outpatient clinic and sleep laboratory. PATIENTS: 60 depressed, insomniac outpatients. INTERVENTIONS: One week of open-label fluoxetine (FLX), followed by 8 more weeks of FLX combined with either eszopiclone (ESZ) 3 mg or placebo at bedtime. MEASUREMENTS: The primary HRQOL measure was the daily living and role functioning subscale (DLRF) of the Basis-32. Other measures included the Q-LES-Q, self-reported sleep, PSG, actigraphy, depression severity (HRSD). RESULTS: At the end of randomized treatment, patients receiving ESZ had lower (better) DLRF scores (0.81 +/- 0.64) than those receiving placebo (1.2 +/- 0.72), p = 0.01. The effect size for DLRF was 0.62, indicating a moderate effect. An advantage for ESZ was also seen in other measures of HRQOL, and most assessments of antidepressant efficacy and sleep. Women reported better end of treatment HRQOL scores than men. CONCLUSIONS: ESZ treatment of insomnia in depressed patients is associated with multiple favorable outcomes, including superior improvement in HRQOL, depression severity, and sleep.