Sleep disturbance is prevalent in aging and painful rheumatologic populations, but it has largely been a neglected dimension of the routine clinical care of arthritis patients. Pain associated with osteoarthritis (OA) is a leading cause of disability worldwide, and factors that contribute to pain in OA are poorly understood. Sleep disturbance is not only a consequence of pain, it is also likely to play an integral role in pain expression. Emerging research suggests that many patients with OA demonstrate signs of generalized hyperalgesia and faulty central pain modulatory processing similar to other idiopathic pain disorders, such as fibromyalgia. Sleep disruption is increasingly recognized as a direct contributor to both hyperalgesia and impaired endogenous pain modulation. This article reviews the extant literature on sleep disturbance and hyperalgesia in patients with OA. We propose a conceptual working model describing pathways by which sleep disturbance interacts directly with central pain processing mechanisms and inflammatory processes, and indirectly with mood and physical functioning to augment clinical OA pain. The clinical and research implications of the model are discussed.