The aim was to elucidate the possible bi-directional relation between daytime psychological arousal, cortisol, and self-reported sleep in a group of healthy employees in active employment. Logbook ratings of sleep (Karolinska Sleep Questionnaire), stress, and energy, as well as positive and negative experiences in work and private life, were collected together with salivary cortisol over 3 days (n = 265). Higher bedtime ratings of stress and problems during the day were associated with morning ratings of poor sleep. Poorer morning ratings of sleep were associated with higher ratings of stress and problems during the day. The results underpin the possibility that arousal and poor sleep might create a self-reinforcing vicious circle that negatively affects a person's well-being.