BACKGROUND The prevalence of dementia in Australian nursing homes is high. A large proportion of residents express themselves through agitated behaviors, with substantial interpersonal and day-to-day variance. One factor that may increase agitation is poor sleep. The current study aimed to determine if sleep influences symptoms of agitation in nursing home residents, and whether this effect differed by dementia status. As benzodiazepines are used widely as hypnotic medication, their impact was also considered. METHODS Actigraph devices worn on residents' non-dominant wrists for three days were used to obtain objective measures of sleep. Symptoms of agitation were assessed using staff responses to two standardized questionnaires - the Cohen-Mansfield Agitation Inventory (CMAI) and the Neuropsychiatric Inventory - nursing home version (NPI-NH). Presence of dementia and benzodiazepine use were obtained from resident medical charts. RESULTS Forty-nine residents (mean age: 85.57 years) from four nursing homes in Tasmania were included in the study. Results indicated that residents were in bed for an average of 11.04 h and slept for 10.14 h per day. Significant relationships between sleep and verbal as well as non-aggressive agitation were found. No relationships between sleep and aggressive agitation were detected. A significant moderation effect of dementia was found, in which residents without dementia expressed verbal agitation when obtaining less sleep, but not residents with dementia. Benzodiazepine use did not result in significantly more sleep. CONCLUSIONS These results suggest that sleep could play an important role in explaining agitation, but more research is needed to explore the relationship between sleep and benzodiazepines in nursing home residents.