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This paper describes the methodology and outcomes of the development of a trauma-informed protocol for cognitive behavioral therapy for insomnia (CBT-I). Methods included (a) convening an expert panel of U.S. Department of Veterans Affairs providers (n = 4) to identify trauma-related symptoms that may interfere with standard CBT-I delivery and to assess trauma-informed adaptations to an existing CBT-I protocol, (b) presenting adapted protocol materials to veteran engagement groups for feedback, and (c) sequentially delivering the trauma-informed CBT-I protocol to women veterans (n = 5) with iterative refinement of the intervention materials and evaluation of clinical improvement (Insomnia Severity Index and Pittsburgh Sleep Quality Index total scores and sleep diaries). Trauma-informed adaptations to CBT-I included posttraumatic stress disorder (PTSD) diagnosis psychoeducation, nighttime hyperarousal reduction strategies, nightmare/sleep avoidance psychoeducation, behavior tracking to challenge avoidance, psychoeducation about trauma-related thoughts, and orientation to PTSD treatments. Veteran engagement group consensus supported expert feedback. Women who completed trauma-informed CBT-I reported improved sleep outcomes from baseline to 3-month follow-up and high perceived acceptability and clarity regarding trauma-informed adaptations. This efficient, multistep approach resulted in an acceptable, efficacious protocol for use in a randomized clinical trial. These methods can be applied to other protocols to systematically adapt other psychotherapies for patients with PTSD.