Spontaneous lucid dreaming is characterized by the realization that the currently perceived reality is in fact a dream. As this ability differs between individuals, specific cognitive abilities have been sought that might explain this variability. Here, “insight,” a key feature of spontaneous lucid dreaming, is investigated. Frequent, occasional, and nonlucid dreamers were compared on their successful performance of a compound remote associate problem-solving task, designed to measure insight. Results show that frequent lucid dreamers solve significantly more insight problems overall than nonlucid dreamers. This suggests that the insight experienced during the dream state may relate to the same underlying cognition needed for insight in the waking state.