Sleep restriction therapy is a central component of cognitive behavioural therapy for insomnia, but can lead to excessive sleepiness, which may impede treatment adherence. Sleep compression therapy has been suggested as a possibly gentler alternative. The aim of this study was to compare the effects of sleep restriction therapy and sleep compression therapy on objective measures of sleep, with a focus on magnitude and timing of effects. From a larger study of participants with insomnia, a sub-sample of 36 underwent polysomnographic recordings, before being randomised to either sleep restriction (n = 19) or sleep compression (n = 17) and receiving online treatment for 10 weeks. Assessments with polysomnography were also carried out after 2, 5, and 10 weeks of treatment. Data were analysed with multilevel linear mixed effect modelling. As per treatment instructions, participants in sleep restriction initially spent shorter time in bed compared with sleep compression. Participants in sleep restriction also showed an initial decrease of total sleep time, which was not seen in the sleep compression group. Both treatments led to improvements in sleep continuity variables, with a tendency for the improvements to come earlier during treatment in sleep restriction. No substantial differences were found between the two treatments 10 weeks after the treatment start. The results indicate that homeostatic sleep pressure may not be as important as a mechanism in sleep compression therapy as in sleep restriction therapy, and an investigation of other mechanisms is needed. In conclusion, the treatments led to similar changes in objective sleep at a somewhat different pace, and possibly through different mechanisms.