This study investigated sleep subtypes in schizophrenia, and their response to Cognitive Behavioural Therapy for Insomnia (CBT-I) treatment. Sleep profiling was conducted using latent class analysis on baseline Pittsburgh Sleep Quality Index data (N = 74 outpatients with schizophrenia who were poor sleepers, 52% male, mean age = 41.4 years). Of these, 40 took part in CBT-I treatment. Analyses revealed three sleep subtypes based on total sleep time (TST), sleep efficiency (SE), and sleep onset latency (SOL) parameters: Cluster 1 (‘classic severe insomnia’ 44.6%), Cluster 2 (‘insomnia with normal sleep duration’ 37.8%), and Cluster 3 (‘insomnia with hypersomnia’ 17.6%). Gains analysis of pre- and post-treatment data from CBT-I participants revealed improvements in sleep and psychopathology in all three clusters, although there were some group differences in the areas and magnitude of improvement. Cluster 1 showed the greatest benefits with longer TST and improved SE. Cluster 2 showed a comparatively blunted treatment response although TST moved closer to recommended sleep guidelines. Cluster 3 showed significant reductions in TST. Altogether, this is the first demonstration of different sleep profiles in schizophrenia and their influence on treatment response to CBT-I. It also supports the notion that therapies should be tailored to the person and their insomnia presentation.