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Chronic Insomnia Disorder (ID) is characterized by hyperarousal, a key pathophysiological feature. While Cognitive-Behavioral Therapy for Insomnia (CBT-I) is the first-line treatment, its physiological effects on sleep-related hyperarousal remain underexplored. This study assessed the impact of CBT-I on cortical hyperarousal using quantitative EEG (qEEG) during non-REM (NREM) sleep, with the delta/beta ratio as the primary outcome. Secondary aims included evaluating changes in sleep stability and exploring phenotypic differences in treatment response. Ninety-eight ID patients across five centers completed a 6-8-week CBT-I program. Pre-and post-treatment assessments included polysomnography (PSG), sleep diaries, and Insomnia Severity Index (ISI). Cortical hyperarousal was indexed by the NREM delta/beta ratio; sleep stability (Sstab) was derived from a transition probability matrix. Patients were categorized as insomnia with short (ISSD) or normal sleep duration (INSD) based on PSG-derived total sleep time (median TST = 347.3 min). CBT-I significantly improved ISI and sleep parameters (sleep onset latency, wake after sleep onset, time in bed, sleep efficiency) in both self-reported and PSG, with smaller effects in the latter. qEEG analyses revealed a significant increase in the delta/beta ratio post-CBT-I (baseline:13.4 ± 4.9, end-of-treatment:14.6 ± 5.9; p = 0.002), indicating reduced cortical hyperarousal, with no center effects. Sstab improved significantly (p = 0.005), though it was not correlated with delta/beta changes. ISSD showed greater delta/beta improvements than INSD (p = 0.014), suggesting phenotypic differences. CBT-I reduces cortical hyperarousal in ID, as reflected by increased delta/beta ratio. The dissociation from sleep stability suggests distinct mechanisms. These findings support qEEG biomarkers as valuable tools for understanding the neurophysiological mechanisms of insomnia treatment and guiding precision medicine approaches.