Epilepsy is associated with sleep disturbance, but little is known about how early this relationship develops and how it affects neuropsychological functioning. This study documented the frequency and types of sleep problems and examined how sleep problems are associated with seizures and neuropsychological functioning in 332 children following their first recognized seizure (ages 6–14) and in 225 sibling controls. Formal neuropsychological batteries were administered to all subjects. Sleep was measured using the Sleep Behavior Questionnaire and the Child Behavior Checklist. Sleep problems were more frequent in the seizure sample relative to siblings and previously published norms; bedtime difficulties, daytime somnolence, and parasomnias were the most frequently occurring sleep problems. In the seizure group, sleep problems were related to seizure parameters and to neuropsychological functioning. Seizure patients with significant sleep problems had worse neuropsychological functioning on all measures. Findings demonstrate the significant impact of sleep disturbance on children with newly recognized seizures.