Despite relatively standardized surgical procedures, patients undergoing total knee replacement (TKR) surgery differ dramatically in the speed of their recovery. Previous research has suggested a relationship between the experience of pain and sleep disruptions among patients with chronic pain or those undergoing surgery, such that more severe pain is associated with more frequent awakenings throughout the night. This study examined sleep disruptions 1 month following surgery as a mediator of the relationship between pain 1 month following surgery and functional limitations 3 months following surgery. A total of 110 patients scheduled to undergo unilateral TKR were examined at three time points: 2–3 weeks prior to surgery, 1 month following surgery, and 3 months following surgery. After controlling for presurgical levels of pain, sleep disruptions, and functional limitations, sleep disruptions 1 month following surgery partially mediated the relationship between pain 1 month following surgery and functional limitations 3 months following surgery. The present findings underscore the importance of adequate sleep during postsurgical recovery and suggest that interventions targeting sleep disruptions may improve the speed and quality of patients’ recovery from TKR and other surgical procedures.