This study was based on Taiwan's National Health Insurance (NHI) claim records with the aim of identifying specific types of potentially inappropriate sedative-hypnotic prescribing in elderly outpatients with insomnia. The potentially inappropriate prescribing included duplicate treatment, excessive dosage and duration or treatment and prescribing of hypnotics that are too long-acting.This cross-sectional study was based on annual outpatient claim data for 2001 released by Taiwan's Bureau of National Health Insurance (BNHI). A subset was created for patients aged 65 years or older and coded as having insomnia. Physician consultation claim data were extracted and merged in 1 claim file consisting of ICD-9-CM codes, patient demographic data, specialty of physicians, medical institution code and pharmaceutical prescription content.Elderly patients with insomnia constituted 216,994 of the 1,000,193 files surveyed on outpatient claims in 2001. The mean age was 74.33 years and gender distribution was nearly equal. Of the prescribed sleep medications, 41.26% were hypnotic benzodiazepines, 29.36% were hypnotic non-benzodiazepines and 29.38% were sedative-anxiolytics. Approximately 1 in 25 patients (4.12%) of all the patients prescribed hypnotics received duplicate treatment, 1 in 8 an inappropriately (12.27%) high dosage (daily dose > 1.5 DDD, Defined Daily Dose), 1 in 3 (32.25%) more than 28 DDD per prescription and 1 in 6 (17.52%) a drug with an effect which was too prolonged. Physicians tended to consider patient gender but not age when prescribing. Clear trends were found between the specialty of the physician and the type of inappropriate prescribing. The type of medical institution was significantly related only to the excessive quantity of medication prescribed.Elderly people in Taiwan with insomnia receive potentially inappropriate prescriptions for sleep medications. Similar data could possibly be extracted from similar databases in other countries throughout the world. Some of these potentially inappropriate prescriptions are avoidable in terms of restricting the length of outpatient sedative-hypnotic treatment, introducing hypnotics in small dosage forms and continuously educating clinicians on the safety of geriatric medication.