Perturbations to the hypothalamic-pituitary-adrenal (HPA) axis have been hypothesized to increase postmenopausal cardiometabolic risk. Although sleep disturbance, a known risk factor for cardiometabolic disease, is prevalent during the menopause transition, it is unknown whether menopause-related sleep disturbance and estradiol decline disturb the HPA axis. We examined the effect of experimental fragmentation of sleep and suppression of estradiol as a model of menopause on cortisol levels in healthy young women. Twenty-two women completed a 5-night inpatient study during the mid-to-late follicular phase (estrogenized). A subset (n = 14) repeated the protocol after gonadotropin-releasing hormone agonist-induced estradiol suppression. Each inpatient study included 2 unfragmented sleep nights followed by 3 experimental sleep fragmentation nights. This study took place with premenopausal women at an academic medical center. Interventions included sleep fragmentation and pharmacological hypoestrogenism, and main outcome measures were serum bedtime cortisol levels and cortisol awakening response (CAR). Bedtime cortisol increased 27% (P = .03) and CAR decreased 57% (P = .01) following sleep fragmentation compared to unfragmented sleep. Polysomnographic-derived wake after sleep-onset (WASO) was positively associated with bedtime cortisol levels (P = .047) and negatively associated with CAR (P < .01). Bedtime cortisol levels were 22% lower in the hypoestrogenized state compared to the estrogenized state (P = .02), while CAR was similar in both estradiol conditions (P = .38). Estradiol suppression and modifiable menopause-related sleep fragmentation both independently perturb HPA axis activity. Sleep fragmentation, commonly seen in menopausal women, may disrupt the HPA axis, which in turn may lead to adverse health effects as women age.