Background: Cognitive behaviour therapy for insomnia (CBT-I) is a well-established treatment; however, the evidence is largely limited to homogenous samples. Although emerging research has indicated that CBT-I is also effective for comorbid insomnia, CBT-I has not been tested among a complex sample of older adults with comorbid insomnia and depression. Furthermore, no study has explored whether modifying CBT-I to target associated depressive symptoms could potentially enhance sleep and mood outcomes. Therefore, this study aims to report a protocol designed to test whether an advanced form of CBT for insomnia and depression (CBT-I-D) is more effective at reducing insomnia and depressive symptoms compared to a standard CBT-I and psychoeducation control group (PCG) for older adults in a community mental health setting. Methods/Design: We aim to recruit 150 older adults with comorbid insomnia who have presented to community mental health services for depression. Eligible participants will be randomly allocated via block/cluster randomisation to one of three group therapy conditions: CBT-I, CBT-I-D, or PCG. Participants who receive CBT-I will only practice strategies designed to improve their sleep, whereas participants who receive CBT-I-D will practice additional strategies designed to also improve their mood. This trial will implement a mixed-methods design involving quantitative outcome measures and qualitative focus groups. The primary outcome measures are insomnia and depression severity, and secondary outcomes are anxiety, hopelessness, beliefs about sleep, comorbid sleep conditions, and health. Outcomes will be assessed at pre-intervention (week 0), post-intervention (week 8), and 3-month follow-up (week 20). Discussion: This CBT study protocol has been designed to address comorbid insomnia and depression for older adults receiving community mental health services. The proposed trial will determine whether CBT-I is more effective for older adults with comorbid insomnia and depression compared to a PCG. It will also establish whether an advanced form of CBT-I-D generates greater reductions in insomnia and depression severity compared to standard CBT-I. The results from the proposed trial are anticipated to have important clinical implications for older adults, researchers, therapists, and community mental health services. Trial registration: Australian and New Zealand Clinical Trials Registry (ANZCTR): ACTRN: 12615000067572 , Date Registered 12 December 2014.