Aim: Extremes in sleep duration play an important role in the development of type 2 diabetes. We examined the associations between sleep duration and sleep debt with estimates of insulin sensitivity and insulin secretion. Methods: Data were derived from the European multi-centre EGIR-RISC study. Sleep duration and sleep debt were derived from a sleep questionnaire asking about sleeping time during the week and during the weekend. Insulin sensitivity and insulin secretion were estimated from a 2-hour Oral Glucose Tolerance Test, with samples every 30 minutes. Associations between sleep duration and sleep debt with insulin sensitivity and insulin secretion, were analysed by multiple linear regression models corrected for possible confounders. Results: Sleep data were available in 1002 participants, 46% men, mean age 48 ± 8 years, who had an average sleep duration of 7 ± 1 hours [range 3–14] and an average sleep debt (absolute difference hours sleep weekend days minus weekdays) of 1 ± 1 hour [range 0–8]. With regard to insulin sensitivity, we observed an inverted U-shaped association between sleep duration and the Stumvoll MCR in (mL/kg/min), with a corrected β (95% CI) of 2.05 (0.8; 3.3) and for the quadratic term −0.2 (−0.3; −0.1). Similarly, a U-shaped association between sleep duration and log HOMA-IR in (µU/mL), with a corrected βs of −0.83 (−1.4; −0.24) and 0.06 (0.02; 0.10) for the quadratic term. Confounders showed an attenuating effect on the associations, while BMI mediated 60 to 91% of the association between sleep duration and insulin sensitivity. No significant associations were observed between sleep duration with insulin secretion or between sleep debt with either insulin sensitivity or insulin secretion. Conclusions: Short and long sleep duration are associated with a lower insulin sensitivity, suggesting that sleep plays an important role in insulin resistance and may provide the link with development of type 2 diabetes.