Psychobiological aspects of low-dose benzodiazepine dependence (LBD) and drug withdrawal were investigated in 76 middle-aged and elderly chronic insomniacs in a sleep laboratory. Comparison with drug-free insomniacs showed that LBD leads to a complete loss of hypnotic activity and substantial suppression of delta and REM sleep. Only small differences were found between benzodiazepines with different half-life time. Upon withdrawal, recovery from this suppression, especially in REM sleep, occurred, while insomnia did not increase. The patients, however, reported sleeping longer while taking the drug compared with withdrawal. This misperception seems to be a specific effect of benzodiazepines, and contrasts with the full awareness of insomnia upon withdrawal. It is concluded that these effects play a leading role in the patients' inability to escape their sleeping pills. The response of REM sleep to withdrawal should make this a useful measure to objectively confirm low-dose benzodiazepine dependence.