Background Baricitinib previously demonstrated improvements in itch and sleep disturbance versus placebo in adults with moderate-to-severe atopic dermatitis (AD). Objectives Examine if itch and sleep improvements are associated with better quality of life (QoL) and productivity in patients with AD. Methods Data were drawn from BREEZE-AD5 (NCT03435081). Itch and sleep improvement at Week 16 were defined using ≥4-point improvements in the Itch Numeric Rating Scale and ≥1.5 decreases in the number of nighttime awakenings since baseline, respectively. Patients with and without improvements were compared on Dermatology Life Quality Index (DLQI) and Work Productivity and Activity Impairment-AD scores. Changes from baseline were analyzed using ANCOVA with last observation carried forward. Proportions were analyzed using logistic regression with non-responder imputation. Results Greater proportions of patients with versus without itch improvement indicated no impact of AD on QoL (37.7 vs. 1.8%). Patients with itch improvement had greater decreases in work time impaired (−29.3 vs. −5.6%). More patients with versus without sleep improvement reported no effect of AD on QoL (25.5 vs. 1.1%); patients with better sleep experienced larger reductions in work time spent impaired (−33.3 vs. −6.1%). Conclusions Patients with AD who experienced itch and sleep improvement had significantly better QoL and productivity.