Despite significant contributions made in the area of persistent/chronic insomnia, especially with regard to the underlying mechanisms driving its maintenance, the area of acute insomnia has received comparatively little attention. The aim of this paper is to review the literature with regard to understanding the situational and personaological circumstances that surround the development of acute insomnia. The review begins by examining how the existing diagnostic systems conceptualise acute insomnia. Theoretical models that explain, or inferentially explain, the transition between normal sleep and acute insomnia are then explored and evaluated. The review then examines the current evidence base in terms of the pathogenesis of acute insomnia from naturalistic and experimental studies. Overall, the findings from the review confirm the paucity of evidence available but perhaps more importantly highlight the need for a structured diagnosis of acute insomnia as the first step in a research and treatment strategy. To this end a diagnostic system, drawing on the existing literature on stress and the systems used to diagnose depression, is forwarded and justified and a research agenda advanced.