This study evaluated the effects of flurazepam 30 mg, lorazepam 4 mg, triazolam 0.5 mg, and placebo upon sleep and memory in eleven normal male subjects continuously monitored for nighttime EEG, EOG, and EMG recording. Subjects received each drug or placebo for two consecutive nights per week for 4 weeks in a repeated measures, double-blind, Latin Square design. Three hours post-administration, subjects were awakened and presented with a series of tasks. Recall was assessed immediately following task presentation and after the final morning awakening. The results showed that every drug significantly decreased stage 1, increased stage 2, and produced no change in stage 3–4 sleep in comparison to placebo. Only lorazepam significantly decreased REM percent. Post-drug recall was significantly decreased in comparison to placebo at night and was further decreased in the morning. Morning recall was significantly poorer when the return to sleep was 2.5 min or less than when the return to sleep was greater than 5 min following the nighttime awakening in all drug conditions. These results indicate that 1. failure of memory consolidation rather than failure of retrieval is the most likely explanation for the morning memory loss and 2. hypnotic drug properties, measured by latency to fall back asleep, affect memory consolidation.