This treatment-development study is a Stage I evaluation of an intervention that combines mindfulness meditation with cognitive-behavior therapy for insomnia (CBT-I). Thirty adults who met research diagnostic criteria for Psychophysiological Insomnia (Edinger et al., 2004) participated in a 6-week, multi-component group intervention using mindfulness meditation, sleep restriction, stimulus control, sleep education, and sleep hygiene. Sleep diaries and self-reported pre-sleep arousal were assessed weekly while secondary measures of insomnia severity, arousal, mindfulness skills, and daytime functioning were assessed at pre-treatment and post-treatment. Data collected on recruitment, retention, compliance, and satisfaction indicate that the treatment protocol is feasible to deliver and is acceptable for individuals seeking treatment for insomnia. The overall patterns of change with treatment demonstrated statistically and clinically significant improvements in several nighttime symptoms of insomnia as well as statistically significant reductions in pre-sleep arousal, sleep effort, and dysfunctional sleep-related cognitions. In addition, a significant correlation was found between the number of meditation sessions and changes on a trait measure of arousal. Together, the findings indicate that mindfulness meditation can be combined with CBT-I and this integrated intervention is associated with reductions in both sleep and sleep-related arousal. Further testing of this intervention using randomized controlled trials is warranted to evaluate the efficacy of the intervention for this population and the specific effects of each component on sleep and both psychological and physiological arousal.