Objective/Background: Despite a well-established role of guilt cognitions in the maintenance and treatment of posttraumatic stress disorder (PTSD), relationships of guilt cognitions to nightmares are not well understood. This study investigated the ways in which guilt cognitions, related to traumatic events, influenced the relationship between combat exposure and trauma-related sleep disturbance in military Veterans with PTSD. Participants: We recruited a sample of 50 Veterans with PTSD who completed study measures at a screening session. Methods: Participants completed self-report measures of exposure to potentially traumatic events, trauma-related guilt (hindsight bias, wrongdoing, and lack of justification) and trauma-related sleep disturbance as measured by a self-report scale and clinician ratings of nightmare severity. Results: Bivariate regression analyses established a relationship of combat exposure to wrongdoing (β = .31, p = .031), and a relationship of wrongdoing with self-reported trauma-related sleep disturbance (β = .27, p = .049) and clinician-rated nightmare severity (β = .36, p = .009). Bootstrapping analysis that included years of education as a covariate found a significant overall indirect effect of combat exposure on clinician-rated nightmare severity exerted through wrongdoing (β = .10, 95% CI [.004, .246]). Conclusions: Results suggest the association of combat exposure with trauma-related sleep disturbance is significantly influenced by perceived wrongdoing related to a traumatic event. Targeting cognitions related to wrongdoing and moral injury during a traumatic event in PTSD treatment may help ameliorate trauma-related sleep disturbance.