The psychological mechanisms by which depressed mood can lead to impaired sleep and poorer overall health remain unclear. The goal of this study was to investigate the extent to which a tendency to ruminate accounts for the associations between depressed mood and both sleep quality and self-reported health in 165 healthy young adults. Self-reported assessments of anxiety, depressed mood, rumination, sleep quality, and general health were collected at two different time points approximately 2 months apart. Structural equation modeling revealed that rumination measured at the earlier time point mediated the relationships between depressed mood and both sleep quality and health, all measured at the later time point, in a model that was a good fit to the data overall, χ2 (50, N = 165) = 103.08, p < 0.001; RMSEA = 0.08 (0.06–0.10), TLI = 0.91, CFI = 0.94. Results were similar whether or not anxiety was controlled. Results indicate that rumination may be a psychological mechanism by which negative mood leads to impaired sleep and poorer perceived health.