Life satisfaction and quality of sleep are important, related components of subjective well-being and general health. However, no earlier investigation is known to have tested the direction of the temporal relation between poor sleep and diminished life satisfaction, including simultaneous examination of shared genetic influences. These features were examined in the present study of a nationwide cohort of 18,631 same-sex Finnish twins with repeated measurements of life satisfaction, sleep quality, and several potential confounders within an interval of 6 years (1975 and 1981). Most individuals (59%) with new-onset life dissatisfaction had experienced suboptimal sleep at baseline. Poor sleep predicted a consistent pattern of life dissatisfaction (odds ratio = 2.1, 95% confidence interval: 1.7, 2.7 from logistic regression on individuals; odds ratio = 3.0, 95% confidence interval: 1.7, 5.3 from conditional logistic regression on twin pairs discordant for life dissatisfaction), whereas life dissatisfaction did not consistently predict poor sleep. There was substantial heritability for both traits, but their shared genetic component was relatively weak, as indicated by genetic correlations of 0.21 for men and 0.27 for women in a multivariate genetic model. This finding is consistent with the hypothesis that poor sleep may have direct effects on the brain, emotions, and mood.