BACKGROUND: Mobile health (mHealth) apps demonstrate promise for improving sleep at scale. End-user engagement is a prerequisite for sustained use and effectiveness. OBJECTIVE: We assessed the needs and preferences of those with poor sleep and insomnia to inform the development of an engaging sleep app. METHODS: We triangulated results from qualitative (focus groups and app reviews) and quantitative (online survey) approaches. A total of 2 focus groups were conducted (N=9). An online survey tested themes identified from the focus groups against a larger population (N=167). In addition, we analyzed 434 user reviews of 6 mobile apps available on app stores. RESULTS: Common focus group themes included the need to account for diverse sleep phenotypes with an adaptive and tailored program, key app features (alarms and sleep diaries), the complex yet condescending nature of existing resources, providing rationale for information requested, and cost as a motivator. Most survey participants (156/167, 93%) would try an evidence-based sleep app. The most important app features reported were sleep diaries (148/167, 88%), sharing sleep data with a doctor (116/167, 70%), and lifestyle tracking (107/167, 64%). App reviews highlighted the alarm as the most salient app feature (43/122, 35%) and data synchronization with a wearable device (WD) as the most commonly mentioned functionality (40/135, 30%). CONCLUSIONS: This co-design process involving end users through 3 methods consistently highlighted sleep tracking (through a diary and WD), alarms, and personalization as vital for engagement, although their implementation was commonly criticized in review. Engagement is negatively affected by poorly designed features, bugs, and didactic information which must be addressed. Other needs depend upon the type of user, for example, those with severe insomnia.