Insomnia is a prevalent sleep disorder that can profoundly impact a person's health and wellbeing. Herbal medicine represents one of the most frequently used complementary and alternative treatments of insomnia. However, the safety and efficacy of herbal medicine for the treatment of this disorder is currently uncertain. In order to ascertain the evidence base for herbal medicine for insomnia, we systematically searched seventeen electronic databases and the reference lists of included studies for relevant randomised controlled trials (RCTs). Fourteen RCTs, involving a total of 1602 participants with insomnia, met the inclusion criteria. Four distinct orally administered herbal monopreparations were identified (i.e., valerian, chamomile, kava and wuling). There was no statistically significant difference between any herbal medicine and placebo, or any herbal medicine and active control, for any of the thirteen measures of clinical efficacy. As for safety, a similar or smaller number of adverse events per person were reported with kava, chamomile and wuling when compared with placebo. By contrast, a greater number of events per person were reported with valerian. While there is insufficient evidence to support the use of herbal medicine for insomnia, there is a clear need for further research in this area.