Alcohol hangover (AH) has been associated with poor sleep due to the negative effects of alcohol intoxication on sleep quantity and sleep quality. The aim of the current study was to further explore the relationship between AH severity and sleep using a naturalistic study design. A further aim was to determine whether quantitative aspects of sleep were a mediating influence on the relationship between AH severity and cognitive performance. As part of the naturalistic study design, 99 drinkers were recruited following a night of drinking in an Australian state capital, with breath alcohol concentration (BrAC) measured as participants were leaving the entertainment district. The following morning at home, participants answered online questions regarding their drinking behaviour on the previous evening, current AH symptoms and sleep quality. Participants also completed an online version of the Trail-Making Test B (TMT-B) to assess cognitive performance. The findings reveal the duration of nightly awakenings to be negatively related to six individual AH symptoms as well as overall AH severity. The number of nightly awakenings, sleep quality and total sleep time correlated with four AH symptoms including overall AH severity. Total AH severity accounted for a moderate amount of variance (11%) in the time to complete the TMT-B. These findings confirm that alcohol consumption negatively affects sleep, which is related to higher next-day hangover severity ratings and poorer cognitive performance.