Insomnia is a significant problem for many people with chronic pain. In this study, we used a combination of daily sleep diaries and ambulatory activity monitoring (actigraphy) to: (i) examine the nature and severity of the sleep disturbance in this patient group; (ii) determine the concordance between sleep diary and actigraph measures of different sleep parameters; (iii) assess the reliability of sleep parameters across nights; and (iv) identify the clinical correlates of insomnia severity. Forty subjects with insomnia associated with chronic musculoskeletal pain completed questionnaires addressing clinical issues of pain severity, medication use, sleep quality, and affective distress. For 2 consecutive nights, each subject then completed a sleep diary and wore an actigraph unit on the non-dominant wrist. The results showed that the sleep diaries and the actigraphs provided similar estimates of total sleep time, time awake after sleep onset, and sleep efficiency, but differed in the measurement of sleep onset latency and nocturnal awakenings. Both methods of assessment exhibited low to moderate reliability across nights. Measures of the same sleep parameters across the two methods of assessment showed low concordance. Of the clinical variables, pain severity had the strongest association with disturbed sleep, but only using the diary method of assessment. Subjects who reported high pain severity also reported greater sleep impairment than subjects with low pain severity, but this was not confirmed by actigraphy. In general, both methods of assessment point to the significance of insomnia associated with chronic musculoskeletal pain as a distinct clinical problem, but the activity monitoring and self-report procedures provide different information. These findings suggest that multi-method assessment is an important consideration for studies of insomnia in patients with chronic pain.