Chronic medical conditions (CMC) and sleep disturbances are common among adults and associated with depression. We tested sleep disturbance as a moderator of the effect of CMC on depressive symptoms. The sample includes 3597 adults surveyed up to five times over 25 years (1986-2012) from the nationally representative American's Changing Lives Study (ACL). A multi-level model was estimated to examine sleep disturbance as a moderator of the CMC and depressive symptom association, with a second interaction tested for age as a moderator of the within-person level variability in CMC and depressive symptom association. Sleep disturbance and CMC were associated with depressive symptoms at the between-person level, while only sleep disturbance was associated with depressive symptoms at the within-person level. Sleep disturbance significantly interacted with CMC such that more CMCs were associated with more depressive symptoms among individuals sleeping well, but poor sleep was associated with worse depression regardless of CMC. A second interaction between age and within-person variability in CMC was found significant, suggesting that younger adults had higher symptoms of depression at times of below average CMC relative to older adults. The effect of CMC on depressive symptoms may depend on sleep as well as age. Sleeping restfully may allow individuals with CMC the rejuvenation needed to cope with illness adaptively.