Sleep‐restriction therapy (SRT) has been shown to improve insomnia symptoms by restricting sleep opportunity. Curtailment of time in bed affects the duration and consolidation of sleep, but also its timing. While recent work suggests that people with insomnia are characterised by misalignment between circadian and behavioural timing of sleep, no study has investigated if SRT modifies this relationship. The primary aim of the present study was to examine change in phase angle after 2 weeks of SRT. As a secondary aim, we also sought to assess the effect of SRT on psychomotor vigilance. After a 1‐week baseline phase, participants implemented SRT for 2 consecutive weeks. Phase angle was derived from the difference between the decimal clock time of dim light melatonin onset (DLMO) and attempted sleep time. Secondary outcomes included vigilance (assessed via hourly measurement during the DLMO laboratory protocol), sleep continuity (assessed via sleep diary and actigraphy), and insomnia severity. In all, 18 participants meeting insomnia criteria (mean [SD] age 37.06 [8.99] years) took part in the study. Consistent with previous research, participants showed robust improvements in subjective and objective sleep continuity, as well as reductions in insomnia severity. The primary outcome (phase angle) was measurable in 15 participants and revealed an increase of 34.8 min (~0.58 hr; 95% confidence interval [CI] 0.01–1.15) from baseline to post‐treatment (mean [SD] 2.27 [0.94] versus 2.85 [1.25] hr). DLMO remained relatively stable (20:49 versus 21:01 hours), while attempted sleep was 46.8 min later (~0.78 hr; 95%CI 0.41–1.15; 23:05 versus 23:52 hours). For psychomotor vigilance, reaction time was delayed (by 52.71 ms, 95% CI 34.44–70.97) and number of lapses increased (by 5.84, 95% CI 3.93–7.75) after SRT. We show that SRT increases phase angle during treatment, principally by delaying the timing of sleep attempt. Future studies are needed to test if an increase in phase angle is linked to clinical improvement. Finally, reduction in vigilance after SRT appears to be of similar magnitude to normal sleepers undergoing experimental sleep restriction, reinforcing the importance of appropriate safety advice during implementation.