There is a paucity of information regarding Australian nurses’ sleep and fatigue levels, and whether they result in impairment. Fortyone Australian hospital nurses completed daily logbooks for one month recording work hours, sleep, sleepiness, stress, errors, near errors and observed errors (made by others). Nurses reported exhaustion, stress and struggling to remain (STR) awake at work during one in three shifts. Sleep was significantly reduced on workdays in general, and workdays when an error was reported relative to days off. The primary predictor of error was STR, followed by stress. The primary predictor of extreme drowsiness during the commute was also STR awake, followed by exhaustion, and consecutive shifts. In turn, STR awake was predicted by exhaustion, prior sleep and shift length. Findings highlight the need for further attention to these issues to optimise the safety of nurses and patients in our hospitals, and the community at large on our roads.