BACKGROUND: Insomnia is an important problem in patients with schizophrenia and is an emerging area of interest for researchers. We propose a treatment algorithm that synthesizes the various psychological and pharmacological interventions for insomnia in this population. METHODS: Our selective literature review incorporates English language articles from 4 medicine databases through May 2016. Selected articles discuss risk factors and treatments for insomnia, as well as comorbid sleep disorders that coexist in this population. RESULTS: Various lifestyle factors and comorbid sleep disorders may predispose patients with schizophrenia to insomnia. Cognitive-behavioral therapy for insomnia shows promising results in treating insomnia in patients with schizophrenia spectrum disorders. Additionally, studies of eszopiclone and melatonin have yielded significant results in short-term trials that evaluated both subjective and objective insomnia symptoms. CONCLUSIONS: We have summarized the relevant literature regarding the treatment of insomnia in this patient population and propose an algorithm comprising 6 sequential steps, beginning with the assessment of sleep complaints and medication adherence. This is followed by a targeted treatment of any co-occurring sleep disorders, and ends with psychoeducation, cognitive-behavioral therapy, and pharmacotherapy. This algorithm provides a detailed guideline to improve the assessment and therapeutic intervention for managing insomnia among patients with schizophrenia.