Most medical rehabilitation and applied medical students suffer from disturbed sleep due to academic and clinical demands. The aim of our study was to assess the relationship between the psychological stresses and sleep quality to inform the organization of mental health programs in medical rehabilitation and applied medical colleges. In order to do this, we evaluate and compare sleep quality in medical students at various phases of their medical course in order to help prevent the effect of stress during their study period. The 300 Medical Rehabilitation and applied medical students from Taibah University, were invited to participate in a cross sectional questionnaire based study on the effect of stress on sleep quality. 271 students completed the forms fully irrespective of the year of study. The instruments used in data collection were self-reported Pittsburg Sleep Quality Index (PSQI), the General Health Questionnaire (GHQ12) and Depression and Anxiety Scale. The results obtained from the instrument components were analyzed for the total sample including the male and female students. 52.05% of the students reported having fairly bad sleep quality. Moreover, there was a relationship between sleep quality, general health status of students, and depression – anxiety status, i.e., a significant difference in coefficient correlation r = 0.532, p = 0.0001(p<=0.05). In our study, we concluded that the majority of the medical rehabilitation and applied medical students in our study seem to be more exposed to poor quality of sleep which could have an impact on academic performance. Active interventions should be implemented to improve sleep hygiene, to reduce depression and anxiety in medical rehabilitation and applied medical students.