Until a few years ago, the association of chronic insomnia with significant medical morbidity was not established and its diagnosis was based solely on subjective complaints. Although the first findings came from the Penn State investigators, there is now evidence from several investigative groups that insomnia with objective short sleep duration (ISS) is the most biologically severe phenotype of the disorder, as it is associated with cognitive-emotional and cortical arousal, activation of both limbs of the stress system, and a higher risk for hypertension, impaired heart rate variability, diabetes, neurocognitive impairment, and mortality. In contrast, insomnia with objective normal sleep duration (INS) is associated with cognitive-emotional and cortical arousal and sleep misperception but not with signs of activation of both limbs of the stress system or medical complications. In addition, the first phenotype is associated with unremitting course, whereas the latter is more likely to remit. Furthermore it appears that patients with ISS and insomnia with normal sleep duration (INS) demonstrate a differential response to two common insomnia treatments, CBT-I and trazodone. CBT-I is recommended as first-line treatment for insomnia, and trazodone is a widely-prescribed medication for insomnia. In addition to being widely-used and well-tolerated, preliminary data demonstrate differential efficacy of CBT-I and trazodone in ISS and INS. Specifically, CBT-I has a stronger effect on INS, whereas trazodone has a stronger effect on ISS. Also trazodone appears to have a much larger effect on the objective sleep duration of patients with ISS as well as on the blood pressure of insomnia patients with elevated blood pressure i.e. > 120/80. This in turn may be related to different effects on HPA axis function: trazodone, but not CBT-I, results in downregulation of HPA axis function as indicated by evening cortisol measurements. Demonstration of differential treatment response in larger randomized clinical trials would aid the goals of precision medicine, which directs therapy not only on the basis of genetics, but also on the basis of clinical phenotypes and physiology. Validation of two common phenotypes of insomnia defined by objective sleep duration will improve treatment outcomes and potentially reduce adverse health consequences associated with insomnia and its treatments.