Informal caregivers of people with dementia frequently experience chronic insomnia, contributing to stress and poor health outcomes. Rural caregivers are particularly vulnerable but have limited access to cognitive behavioral therapy for insomnia (CBT-I), a recommended frontline treatment for chronic insomnia. Web-based delivery promises to improve insomnia, particularly for rural caregivers who have limited access to traditional in-person treatments. Our team translated an efficacious 4-session standard CBT-I content protocol into digital format to create NiteCAPP. This study aimed to (1) adapt NiteCAPP for dementia caregivers to create NiteCAPP CARES, a tailored digital format with standard CBT-I content plus caregiver-focused modifications; (2) conduct usability testing and evaluate acceptability of NiteCAPP CARES' content and features; and (3) pilot-test the adapted intervention to evaluate feasibility and preliminary effects on sleep and related health outcomes. We followed Medical Research Council recommendations for evaluating complex medical interventions to explore user needs and adapt and validate content using a stepwise approach: (1) a rural dementia caregiver (n=5) and primary care provider (n=5) advisory panel gave feedback that was used to adapt NiteCAPP; (2) caregiver (n=5) and primary care provider (n=7) focus groups reviewed the newly adapted NiteCAPP CARES and provided feedback that guided further adaptations; and (3) NiteCAPP CARES was pilot-tested in caregivers (n=5) for feasibility and to establish preliminary effects. Self-report usability measures were collected following intervention. Before and after treatment, 14 daily electronic sleep diaries and questionnaires were collected to evaluate arousal, health, mood, burden, subjective cognition, and interpersonal processes. The stepped approach provided user and expert feedback on satisfaction, usefulness, and content, resulting in a new digital CBT-I tailored for rural dementia caregivers: NiteCAPP CARES. The advisory panel recommended streamlining content, eliminating jargon, and including caregiver-focused content. Focus groups gave NiteCAPP CARES high usefulness ratings (mean score 4.4, SD 0.79, scored from 1=least to 5=most favorable; score range 4.2-4.8). Multiple features were evaluated positively, including the intervention's comprehensive and engaging information, caregiver focus, good layout, easy-to-access intervention material, and easy-to-understand sleep graphs. Suggestions for improvement included the provision of day and night viewing options, collapsible text, font size options, tabbed access to videos, and a glossary of terms. Pilot-test users rated usefulness (mean score 4.3, SD 0.83; range 4.1-4.5) and satisfaction (mean score 8.4, SD 1.41, scored from 1=least to 10=most satisfied; range 7.4-9.0) highly. Preliminary effects on caregiver sleep, arousal, health, mood, burden, cognition, and interpersonal processes (all P<.05) were promising. Adaptations made to standard digital CBT-I created a feasible, tailored digital intervention for rural dementia caregivers. Important next steps include further examination of feasibility and efficacy in a randomized controlled trial with an active control condition, a multisite effectiveness trial, and eventual broad dissemination. ClinicalTrials.gov NCT04632628; https://clinicaltrials.gov/ct2/show/NCT04632628.