ABSTRACT Parasomnias are abnormal behaviours or mental experiences during sleep or the sleep–wake transition. As disorders of arousal (DOA) or REM sleep behaviour disorder (RBD) can be difficult to capture in the sleep laboratory and may need to be diagnosed in large communities, new home diagnostic devices are being developed, including actigraphy, EEG headbands, as well as 2D infrared and 3D time of flight home cameras (often with automatic analysis). Traditional video‐polysomnographic diagnostic criteria for RBD and DOA are becoming more accurate, and deep learning methods are beginning to accurately classify abnormal polysomnographic signals in these disorders. Big data from vast collections of clinical, cognitive, brain imaging, DNA and polysomnography data have provided new information on the factors that are associated with parasomnia and, in the case of RBD, may predict the individual risk of conversion to an overt neurodegenerative disease. Dream engineering, including targeted reactivation of memory during sleep, combined with image repetition therapy and lucid dreaming, is helping to alleviate nightmares in patients. On a political level, RBD has brought together specialists in abnormal movements and sleep neurologists, and research into nightmares and sleep–wake dissociations has brought together sleep and consciousness scientists.