Infant sleep undergoes dramatic evolution during the first year of life. This process is driven by underlying biological forces but is highly dependent on environmental cues including parental influences. In this review the links between infant sleep and parental behaviors, cognitions, emotions and relationships as well as psychopathology are examined within the context of a transactional model. Parental behaviors, particularly those related to bedtime interactions and soothing routines, are closely related to infant sleep. Increased parental involvement is associated with more fragmented sleep. Intervention based on modifying parental behaviors and cognitions have direct effect on infant sleep. It appears that parental personality, psychopathology and related cognitions and emotions contribute to parental sleep-related behaviors and ultimately influence infant sleep. However, the links are bidirectional and dynamic so that poor infant sleep may influence parental behaviors and poor infant sleep appears to be a family stressor and a risk factor for maternal depression.