Background Sleep disturbances are common among older people (>65 years). Further, long-term use of sedative-hypnotics in older people is associated with morbidity and mortality. However, older people represent a large span of life years, and few studies have included the oldest-old above 85 years. Aim To investigate and compare sleep quality, use of hypnotics and sleeping habits in different age groups of the older population in the Scania region, Sweden and in relation to sociodemographic- and functional status. Design and participants A cross-sectional population-based study including 2931 people aged 60–93 years from five different municipalities in Scania was performed during 2001–2004. Method The sample was divided into age groups, young-old (60–72 years), old-old (78–84 years) and oldest-old (87–93) years. Data constitutes of sleep related questions, sociodemographic- and functional status from the study ‘Good Ageing in Skåne’. Descriptive statistics were used to describe sleep quality, hypnotics use and sleeping habits in relation to sociodemographic- and functional status. The aim was to investigate associations, not the magnitude of associations between variables. Results In all age groups, those who used hypnotics and were living alone had significantly poorer sleep quality and shortest sleeping time than nonhypnotic users and those who lived together. A significant increase of hypnotics and frequency of use was seen with increasing age. Frequency of napping increased significantly with degree of dependence in all age groups and with increasing age. Conclusions Insomnia is still a problem and hypnotic use has not improved sleep for a large number of older people. Hypnotics are effective as short-term treatment, however, nonpharmacological interventions and psychological and behavioural therapies should be considered for treating older people with chronic insomnia.