<i>Introduction</i>: The altered circadian rhythm from home confinement during COVID-19 pandemic has resulted to mental disturbances and interference of sleep specifically among vulnerable groups. The present study was aimed to evaluate the impacts of the pandemic on the sleep status of peoples living with chronic medical diseases. <i>Methods</i>: A cross-sectional study was undertaken at southwest Ethiopia from June 1 to July 30, 2020 among 411 patients with chronic medical conditions. Descriptive statistics such as frequency table, percentage and chi-square test were used. Binary and multivariate logistic regressions were conducted and p-value of<0.05 was considered significant. <i>Results</i>: The mean age of the participants was 43.6±13.34 years and 32.6% (95% CI: 28.5, 37.2) of participants had reported insomnia. Age, marital status and educational levels had significant relations with insomnia on chi-square test. After controlling for potential confounders, poor social support (AOR=2.32, 95% CI=1.27, 4.23), greater than 6 years duration of illness (AOR=3.18, 95% CI=1.92, 5.27), presence of depression (AOR=1.74, 95% CI=1.09, 2.75) and alcohol use (AOR=1.89, 95% CI=1.19, 3.00) had greater odds for insomnia when compared to their counters. <i>Conclusions</i>: From this study, substantial proportion of insomnia was found to be evident among peoples living with chronic medical condition amidst COVID-19 pandemic and poor social support, longer duration of illness, presence of depression and alcohol use were contributing factors. Generally, there was a significant increase in insomnia after the emergence of COVID-19 pandemic among this population and appropriate education on the regular basis on the benefits of sleep behaviour has paramount importance.