Parasomnia disorders are classified into the following categories:

- arousal disorders

- sleep-wake transition disorders

- parasomnias associated with REM sleep

Under DSM-5 criteria, there are 11 diagnostic groups that comprise sleep-wake disorders. These include, Insomnia disorder, Hypersomnolence disorder, Narcolepsy, Obstructive sleep apnea hypopnea, Central sleep apnea, Sleep-related hypoventilation, Circadian rhythm sleep-wake disorders, Non–rapid eye movement (NREM) sleep arousal disorders, Nightmare disorder, Rapid eye movement (REM) sleep behavior disorder, Restless legs syndrome, and substance-medication-induced sleep disorder. Sexsomnia is classified under NREM arousal parasomnia.

Both of these conditions (RLS and PLM) are classified as dyssomnias according to the DSM-IV.

REM sleep behavior disorder or RBD is the most common REM sleep parasomnia in which muscle atonia is absent. This allows the individual to act out their dreams and may result in repeated injury—bruises, lacerations, and fractures—to themselves or others. Patients may take self-protection measures by tethering themselves to bed, using pillow barricades, or sleeping in an empty room on a mattress.

Demographically, 90% of RBD patients are males, and most are older than 50 years of age.

Typical clinical features of REM sleep behavior disorder are:

- Male gender predilection

- Mean age of onset 50–65 years (range 20–80 years)

- Vocalisation, screaming, swearing that may be associated with dreams

- Motor activity, simple or complex, that may result in injury to patient or bed-partner

- Occurrence usually in latter half of sleep period (REM sleep)

- May be associated with neurodegenerative disease

Acute RBD, occurs mostly as a result of a side-effect in prescribed medication—usually antidepressants. But if not then 55% of the time the cause is unknown the other 45% the cause is associated with alcohol.

Chronic RBD is idiopathic, meaning of unknown origin, or associated with neurological disorders. There is a growing association of chronic RBD with neurodegenerative disorders—Parkinson's disease, multiple system atrophy (MSA), or dementia—as an early indicator of these conditions by as much as 10 years.

Patients with narcolepsy also are more likely to develop RBD.

In the study "sleepwalking and sleep terrors in prepubera children", it was found that, if a child had another sleep disorder such as restless leg syndrome (RLS) or sleep-disorder breathing (SDB), there was a greater chance of sleepwalking. The study found that children with chronic parasomnias may often also present SDB or, to a lesser extent, RLS. Furthermore, the disappearance of the parasomnias after the treatment of the SDB or RLS periodic limb movement syndrome suggests that the latter may trigger the former. The high frequency of SDB in family members of children with parasomnia provided additional evidence that SDB may manifest as parasomnias in children. Children with parasomnias are not systematically monitored during sleep, although past studies have suggested that patients with sleep terrors or sleepwalking have an elevated level of brief EEG arousals. When children receive polysomnographies, discrete patterns (e.g., nasal flow limitation, abnormal respiratory effort, bursts of high or slow EEG frequencies) should be sought; apneas are rarely found in children. Children's respiration during sleep should be monitored with nasal cannula/pressure transducer system and/or esophageal manometry, which are more sensitive than the thermistors or thermocouples currently used in many laboratories. The clear, prompt improvement of severe parasomnia in children who are treated for SDB, as defined here, provides important evidence that subtle SDB can have substantial health-related significance. Also noteworthy is the report of familial presence of parasomnia. Studies of twin cohorts and families with sleep terror and sleepwalking suggest genetic involvement of parasomnias. RLS and SDB have been shown to have familial recurrence. RLS has been shown to have genetic involvement.

In some cases, sleepwalking in adults may be a symptom of a psychological disorder. One study suggests higher levels of dissociation in adult sleepwalkers, since test subjects scored unusually high on the hysteria portion of the "Crown-Crisp Experiential Index". Another suggested that "A higher incidence [of sleepwalking events] has been reported in patients with schizophrenia, hysteria and anxiety neuroses". Also, patients with migraine headaches or Tourette Syndrome are 4–6 times more likely to sleepwalk.

Three common diagnostic systems that are generally used for sleepwalking disorders are International Classification of Diagnoses, the International Classification of Sleep Disorders 3, and the Diagnostic and Statistical Manual. Polysomnography is the only accurate measure of sleepwalking. Other measures commonly used include self-report, parent, partner or house-mate report.

Sleepwalking should not be confused with alcohol- or drug-induced blackouts, which can result in amnesia for events similar to sleepwalking. During an alcohol-induced blackout (drug-related amnesia), a person is able to actively engage and respond to their environment (e.g. having conversations or driving a vehicle), however the brain does not create memories for the events. Alcohol-induced blackouts can occur with blood alcohol levels higher than 0.06g/dl. A systematic review of the literature found that approximately 50% of drinkers have experienced memory loss during a drinking episode and have had associated negative consequences similar to sleepwalkers, including injury and death.

Other differential diagnoses include Rapid eye movement sleep behavior disorder, confusional arousals, and night terrors.