Abstract Introduction Insomnia has significant overlap with anxiety, and CBT for insomnia, in addition to improving sleep, leads to concomitant reductions in anxiety. Nevertheless, few studies have evaluated the anxiolytic effects of CBT for insomnia in individuals with insomnia and clinically significant anxiety symptoms or an anxiety disorder diagnosis. Large studies of digital CBT provide a prudent source to evaluate the transdiagnostic role of insomnia to reduce anxiety symptoms. Using data from two trials of dCBT for insomnia, we evaluated whether sleep is a transdiagnostic treatment target to reduce anxiety symptoms in individuals with insomnia and clinically significant anxiety. Methods Individual data from 2,172 participants with insomnia and clinically significant anxiety symptoms were extracted from two previously conducted randomised controlled trials of dCBT for insomnia. Participants received either dCBT or control (usual care or sleep hygiene education). Assessments were conducted at baseline, post-intervention (week 8 or 10), and follow-up (week 22 or 24). Insomnia symptoms were assessed using the Sleep Condition Indicator (SCI-8), and anxiety symptoms using the 7-item Generalized Anxiety Disorder scale (GAD-7). Mediation was evaluated using structural equation models. Results Compared with control, dCBT for insomnia was superior at reducing symptoms of insomnia (Hedges’ g range: 0.71-0.88; both p< 0.001) and anxiety (Hedges’ g range: 0.39-0.44; both p< 0.001). At post-intervention, participants in the dCBT group were significantly more likely to achieve remission (OR = 2.24 (0.30); < 0.001 (1.72, 2.91)) and reliable remission (OR = 2.24 (0.30); < 0.001 (1.73, 2.89)) of their anxiety. Improvements in sleep at post-intervention mediated 84% of the effect of dCBT on anxiety symptoms at follow-up. Conclusion Targeting insomnia symptoms via digital CBT for insomnia may be an appropriate means by which to reduce anxiety symptoms in individuals with insomnia and comorbid anxiety. These findings reinforce the transdiagnostic benefits of CBT for insomnia and digital CBT may offer an accessible first step intervention. Support (if any) This work was supported in part by the National Institute for Health Research (NIHR) Oxford Biomedical Research Centre (BRC). The views expressed are those of the author(s) and not necessarily those of the NHS, the NIHR, or the Department of Health and Social Care.