Sleep disturbance and cognitive dysfunction are two key domains of impairment during the inter-episode phase of bipolar disorder. Despite considerable evidence demonstrating the importance of sleep for cognition in healthy and sleep-disordered samples, this link has been minimally examined in bipolar disorder. Thus, the present study tested the association between insomnia-related sleep disruptions and cognitive functioning during inter-episode bipolar disorder. Forty-seven participants with bipolar disorder and a comorbid insomnia diagnosis (BD-INSOMNIA) and 19 participants with bipolar disorder without sleep disturbance in the last six months (BD-CONTROL) participated in the study. Two domains of cognitive functioning were assessed: working memory and verbal learning. Insomnia-related sleep disruptions were assessed both categorically (i.e., insomnia diagnosis) and dimensionally (i.e., total wake time, sleep duration, and sleep duration variability). Hierarchical linear regressions, adjusting for participant age, demonstrated that insomnia diagnosis did not have an independent or interactive effect on cognition. However, regardless of insomnia diagnosis, greater total wake time predicted poorer working memory performance and greater sleep duration variability predicted poorer working memory and verbal learning performance. Further, following sleep treatment, a reduction in total wake time predicted improved working memory performance and a reduction in sleep duration variability predicted improved verbal learning performance. These findings raise the possibility that sleep disturbance may be one mechanism underlying cognitive dysfunction in bipolar disorder and highlight the importance of treating sleep disturbance in bipolar disorder.