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This study examines the association between nighttime sleep characteristics and cortisol levels and how these variables relate to aspects of children's temperament and behavior. Twenty‐seven healthy children, aged 12–36 months, attending group childcare settings, participated in the study. Each child's sleep was measured at home with actigraphy over three nights. Saliva samples were collected by the mothers at bedtime and within 30 min of awakening. In addition, both the mother and the daycare teacher rated the child's behavioral difficulties and negative emotionality. It was found that children with more fragmented sleep displayed higher awakening cortisol levels compared to children with more efficient sleep. Moreover, elevated awakening cortisol levels were correlated with teachers' ratings of internalizing behavior and negative emotionality. These preliminary findings suggest that awakening cortisol may …