Avicennian philosophy and medicine are profoundly interconnected, such that Avicenna employs his philosophical foundations in medicine and introduces certain medical principles (such as the vaporous spirit/pneuma, etc.) as axioms into his philosophy. The issue of sleep has been examined from various aspects in Avicennian medicine and philosophy. Employing a descriptive-analytical method, the present study investigates sleep disorders and their treatments from the perspective of Avicenna. Considering the mutual influence of the rational soul and the body, bodily disorders and diseases—particularly distemperament (dyscrasia)—lead to the occurrence of distressing dreams and sleep disorders, whereas those with a temperate temperament experience the best quality of sleep. On the other hand, psychological states also affect sleep, in such a way that the development of a disposition (faculty (malakah) of soul) for lying and other vicious traits in an individual causes confused and unreal dreams. Avicenna’s therapeutic strategies for sleep disorders are predicated on the relationship between the rational soul and the body, thus emphasizing the strengthening of the vaporous spirit. To this end, Avicenna recommends the consumption of specific foods and the practice of phlebotomy (bloodletting).