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Background While the negative consequences of insomnia are well-documented, a strengths-based understanding of how sleep can increase health promotion is still emerging and much-needed. Correlational evidence has connected sleep and insomnia to resilience; however, this relationship has not yet been experimentally tested. This study examined resilience as a mediator of treatment outcomes in a randomized clinical trial with insomnia patients. Methods Participants were randomized to either digital cognitive behavioral therapy for insomnia (dCBT-I; n = 358) or sleep education control (n = 300), and assessed at pre-treatment, post-treatment, and 1-year follow-up. A structural equation modeling framework was utilized to test resilience as a mediator of insomnia and depression. Risk for insomnia and depression was also tested in the model, operationalized as a latent factor with sleep reactivity, stress, and rumination as indicators (aligned with the 3-P model). Sensitivity analyses tested the impact of change in resilience on the insomnia relapse and incident depression at 1-year follow-up. Results dCBT-I resulted in greater improvements in resilience compared to the sleep education control. Furthermore, improved resilience following dCBT-I lowered latent risk, which was further associated with reduced insomnia and depression at 1-year follow-up. Sensitivity analyses indicated that each point improvement in resilience following treatment reduced the odds of insomnia relapse and incident depression 1 year later by 76% and 65%, respectively. Conclusions Improved resilience is likely a contributing mechanism to treatment gains following insomnia therapy, which may then reduce longer-term risk for insomnia relapse and depression.