Objective To evaluate the current management of over-the-counter (OTC) insomnia complaints in Australian community pharmacies using standardized patient methodology. Methods Trained standardized patients visited a sample of 100 randomly selected South East Queensland community pharmacies in June 2011. The standardized patients enacted two OTC insomnia scenarios: a direct product request (DPR) (n = 50) and a symptom-based request (SBR) (n = 50). Results of the interactions were documented immediately after each visit and evaluated using the Pharmaceutical Society of Australia's WHAT STOP GO protocol as a standard comparison. Key findings Of all DPRs, 30% were handled entirely by the pharmacist, 70% of staff enquired about specific symptoms and 28% investigated the cause of insomnia. No staff investigated the frequency of product use. The DPR scenario resulted in a 92% supply of the requested doxylamine product (Restavit). In the SBR scenario, 18% of requests were handled entirely by the pharmacist, 58% of staff enquired about specific symptoms and 44% investigated the cause of insomnia. Staff recommended medicated products (38%), or herbal (78%) or non-drug techniques (18%). Investigation into smoking and alcohol intake was not undertaken in DPR or SBR interactions, while questioning on caffeine intake was undertaken in 2 and 14% of cases respectively. There were no significant differences found in the handling of sleep requests by pharmacists compared to pharmacy assistants. Conclusion The standardized patient methodology was a successful way to assess the community pharmacy counselling provided with OTC sleep requests and suboptimal staff responses were found when compared with recommended practice standards.