SummaryInsomnia has been shown to negatively affect one's cognitive functioning. While there has been some evidence suggesting sleep disruption in relation to impaired inhibitory control, a major component of executive function, little is known about the underlying neural processing in insomnia. The current study aimed to examine the differences in the behavioral responses and electroencephalography (EEG) correlates of inhibitory control between youths with insomnia and healthy sleepers. Twenty‐eight participants with insomnia disorder and 31 healthy sleeper controls aged between 15 and 25 completed the study. Electroencephalographic activity was recorded during the Cued Go/NoGo (CGNG) task, a task assessing inhibitory control. Although insomnia group exhibited comparable behavioral performance to the healthy sleeper group, they showed impaired attention preparation, as displayed by a smaller contingent negative variation (CNV) component (F = 4.10, p = 0.048) after cue onset; and demonstrated impaired inhibitory control, as evidenced by smaller N2 and theta power on 200–350 ms (MANCOVA multivariate Group effect, F = 5.85, p < 0.001). The results suggested that youths with insomnia demonstrated altered brain activity during inhibitory control, despite their comparable behavioral performance. Given that impaired inhibitory control is often implicated in psychopathology, future studies with a longitudinal design are needed to further explore the long‐term impacts and trajectory of altered inhibitory control in youths with insomnia.