Scientists say the drug, also known as zolpidem, appears to act broadly in the brain and has a numbing effect for at least half an hour after waking.
Experts say people should not avoid taking it but should be aware of the drug's effects.
The effects were less pronounced in adults under 60, but 27 percent of the younger volunteers were also affected.
Other sleep medications also had undesirable side effects.
Scientists say this study in the Journal of the American Geriatric Society shows there should be development of new sleep medications that are effective but are safer.