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The current research tested a new theory of depression that integrates work on sleep and cognition. In general, good sleep is essential for physical and mental health. However, we theorize that sleep can actually increase risk for depressive symptoms in cognitively vulnerable individuals. This is because the negative cognitions generated by these individuals are strengthened and consolidated each night during sleep. Three studies were conducted to test this theory. Studies 1 (n = 134) and 2 (n = 47) used prospective designs and showed that undergraduates with high, but not low, levels of cognitive vulnerability were most likely to exhibit increases in depressive symptoms when sleeping well as operationalized by self-reported quality and objectively measured duration (via actigraphy). Study 3 (n = 40) used an experimental design and provides the first causal evidence that it may be possible to prevent future depressive symptoms in cognitively at-risk undergraduates by restricting their sleep during times of high perceived stress.