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Imagery rehearsal therapy (IRT) is an empirically validated therapy targeting recurring nightmares, for which the mechanisms of action remain poorly understood. The objective of this study was to investigate how an exploratory measure of self-efficacy could mediate IRT's effectiveness. Thirty-five victims of sexual assault with recurring nightmares were randomly assigned to either IRT or a control condition. Participants completed questionnaires about self-efficacy and nocturnal symptoms at pre- and posttreatment. Regression analyses showed that IRT predicted greater self-efficacy about dreams (β = .578) and that self-efficacy about dreams predicted improvement in insomnia (β = −.378). IRT also predicted greater self-efficacy about nightmares (β = .366), which in turn predicts sleep quality (β = −.412). However, self-efficacy was not a significant mediator of IRT's effectiveness on insomnia and sleep quality. Although IRT did increase patients' self-efficacy over dreams and nightmares, self-efficacy may not be a primary mechanism of action explaining IRT's effectiveness.