Wearable sleep trackers are increasingly used in applied psychology. Particularly, the recent boom in the fitness tracking industry has resulted in a number of relatively inexpensive consumer-oriented devices that further enlarge the potential applications of ambulatory sleep monitoring. While being largely positioned as wellness tools, wearable sleep trackers could be considered useful health devices supported by a growing number of independent peer-reviewed studies evaluating their accuracy. The inclusion of sensors that monitor cardiorespiratory physiology, diurnal activity data, and other environmental signals allows for a comprehensive and multidimensional approach to sleep health and its impact on psychological well-being. Moreover, the increasingly common combination of wearable trackers and experience sampling methods has the potential to uncover within-individual processes linking sleep to daily experiences, behaviors, and other psychosocial factors. Here, we provide a concise overview of the state-of-the-art, challenges, and opportunities of using wearable sleep-tracking technology in applied psychology. Specifically, we review key device profiles, capabilities, and limitations. By providing representative examples, we highlight how scholars and practitioners can fully exploit the potential of wearable sleep trackers while being aware of the most critical pitfalls characterizing these devices. Overall, consumer wearable sleep trackers are increasingly recognized as a valuable method to investigate, assess, and improve sleep health. Incorporating such devices in research and professional practice might significantly improve the quantity and quality of the collected information while opening the possibility of involving large samples over representative time periods. However, a rigorous and informed approach to their use is necessary.