Abstract Introduction Trauma can lead to mental health disorders, such as posttraumatic stress disorder (PTSD) and depression. Historically, insomnia was thought of as a secondary symptom of these mental health disorders, but current research suggests insomnia can be an independent clinical disorder and can contribute to the development and severity of PTSD and depression among civilians. However, previous studies examining insomnia and mental health symptoms among service members are limited by cross-sectional designs, reliance on retrospective data, or inclusion of predominately male samples. We prospectively examined associations among trauma exposure, insomnia, and mental health symptoms in an exclusive sample of women service members and veterans. Methods We analyzed 2 waves of survey data (2011-2013, Time 1 [T1], and 2014-2016, Time 2 [T2]) from 26,443 current and former women service members from the Millennium Cohort Study. We assessed recent traumas (combat experience and sexual trauma) in the past 3 years, probable insomnia at T1, and probable PTSD and depression at T2. A longitudinal mediation model was used to quantify separate indirect effects of recent traumas on mental health outcomes through probable insomnia. Results Women who experienced recent sexual assault (odds ratio [OR] = 1.68; 95% CI, 1.24-2.10), sexual harassment (OR = 1.22; 95% CI, 1.05-1.41), or combat (OR = 1.34; 95% CI, 1.20-1.49) at T1 had greater risk of probable insomnia at T1 compared with women who had not recently experienced these events. Probable insomnia at T1, in turn, was associated with probable depression (OR = 2.66; 95% CI, 2.31-3.06) and PTSD (OR = 2.57; 95% CI, 2.27-2.90) at T2. Recent combat experience did not moderate the associations of recent sexual trauma with insomnia or mental health outcomes. Conclusion Insomnia contributes to subsequent mental health symptoms following trauma. The diagnosis and treatment of post-trauma insomnia during military service should be prioritized to mitigate the development of posttraumatic mental health symptoms. Sleep health in women service members remains an understudied area of research and should also be prioritized. Support (if any) Millennium Cohort Study: Military Operational Medicine Research Program, Defense Health Program, and Department of Veterans Affairs. VA HSR&D (RCS-20-191, Martin); NHLBI (K24HL143055, Martin).