Nearly one-third of the population reports new onset or acute insomnia in a given year. Similarly, it is estimated that approximately 10% of the population endorses sleep initiation and maintenance problems consistent with diagnostic criteria for chronic insomnia. For decades, acute and chronic insomnia have been considered variations of the same condition or disorder, only really differentiated in terms of chronicity of symptoms (days/weeks versus months). Whether or not acute and chronic insomnia are part of the same phenomena is an important question, one that has yet to be empirically evaluated. The goal of the present theoretical review was to summarize the definitions of acute and chronic insomnia and discuss the role that hyperarousal may have in explaining how the pathophysiology of acute and chronic insomnia is likely different (i.e., what biopsychological factors precipitate and/or perpetuate acute insomnia, chronic insomnia, or both?).