Both cross-sectional studies of chronic pain and sleep deprivation experiments suggest a bi-directional relationship between sleep and pain. Few longitudinal studies, however, have assessed whether acute insomnia following traumatic injury predicts the development of persistent pain. We sought to evaluate (1) whether in-hospital insomnia independently predicts long-term pain after burn injury and (2) whether in-hospital pain predicts future insomnia symptoms. We analyzed data on 333 subjects hospitalized for major burn injury (72.7% male; mean age=41.1+/-14.5years) who were participating in the multi-site, Burn Model System project. Subjects completed measures of health, function (SF-36), and psychological distress (Brief Symptom Inventory) while in hospital, at 6, 12, and 24months after discharge. Participants were categorized as either having or not having sleep onset insomnia at discharge. Linear mixed effects analyses revealed that persons reporting insomnia at discharge (40.5%) had significantly decreased improvement in pain and increased pain severity during long-term follow-up (p<0.001). More severe pain during the week preceding hospital discharge, time from injury, lack of college education and older age also contributed independent effects on chronic pain (p<0.05). In a reciprocal model (N=299), more severe pain during the week preceding discharge predicted increased rates of long-term sleep onset insomnia. In-hospital insomnia and pre-burn mental health symptoms were also highly significant predictors of insomnia. This study provides support for a long-term, prospective and reciprocal interaction between insomnia and pain. Future work should ascertain whether treatment of insomnia and pain during acute injury can prevent or minimize chronic pain.