Given the high stress and unfriendly environment caused by imprisonment, prisoners are at risk of developing insomnia. It is important to understand potential intervention (in this case, mindfulness) in improving insomnia for this population. The present study investigated whether dispositional mindfulness can be beneficial in helping relieve insomnia among Iranian prisoners. It also investigated whether psychological distress and perceived stress are potential mediators. Male prisoners (N = 208) aged 39.08 years (SD = 7.85) completed questionnaires and reported their demographic information and mindfulness (at baseline); psychological distress and sleep quality (at 1 month after baseline assessment); sleep quality and insomnia (at 3 months after baseline assessment). The mediation models using 10,000 bootstrapping resamples showed that sleep quality and insomnia significantly improved when mindfulness increased. Moreover, psychological distress and stress partially mediated the aforementioned association between dispositional mindfulness and sleep quality/insomnia. Using mindfulness to improve sleep quality/insomnia may be a promising psychological intervention for prisoners.