To quantify and compare potential benefits (subjective reports of sleep variables) and risks (adverse events and morning-after psychomotor impairment) of short term treatment with sedative hypnotics in older people with insomnia. Medline, Embase, the Cochrane clinical trials database, PubMed, and PsychLit, 1966 to 2003; bibliographies of published reviews and meta-analyses; manufacturers of newer sedative hypnotics (zaleplon, zolpidem, zopiclone) regarding unpublished studies. Randomised controlled trials of any pharmacological treatment for insomnia for at least five consecutive nights in people aged 60 or over with insomnia and otherwise free of psychiatric or psychological disorders. 24 studies (involving 2417 participants) with extractable data met inclusion and exclusion criteria. Sleep quality improved (effect size 0.14, P 0.05), and reports of daytime fatigue were 3.82 times more common (1.88 to 7.80, P < 0.001) in people using any sedative compared with placebo. Improvements in sleep with sedative use are statistically significant, but the magnitude of effect is small. The increased risk of adverse events is statistically significant and potentially clinically relevant in older people at risk of falls and cognitive impairment. In people over 60, the benefits of these drugs may not justify the increased risk, particularly if the patient has additional risk factors for cognitive or psychomotor adverse events.