People diagnosed with borderline personality disorder (BPD) have been found to have a number of sleep problems, including frequent and distressing nightmares. The experience of nightmares is likely to worsen emotion dysregulation and decrease coping abilities the subsequent day, making it an important issue for clinicians to address. One recent theoretical model of BPD psychopathology, the Emotional Cascade Model (ECM), may shed light on this phenomenon by characterizing nightmares as the experience of emotional cascades that occur during sleep. A model is presented in which these cascades may carry over from a stressful day and lead to elevated cognitive activity during sleep, as well as nightmare-like phenomena. To test this model we used experience sampling from 47 participants exhibiting dysregulated behaviors-16 of them diagnosed with BPD. Negative emotion, rumination, and number of nightmares were assessed daily across two consecutive weeks. Analyses indicated that the BPD group experienced more frequent nightmares, that BPD diagnosis interacted with baseline trait rumination to prospectively predict number of nightmares reported during monitoring, and daily experience of emotional cascades predicted subsequent number of nightly nightmares. These findings held after controlling for key covariates, including sleep quality and diagnoses of depression and posttraumatic stress disorder. Important clinical interventions consistent with the ECM conceptualization of nightmares are proposed, including the potential for management of daily rumination and negative emotion, imagery rescripting for recurrent or anxiously anticipated nightmares, and potential prescription of prazosin (an alpha1-adrenergic antagonist) for the reduction of nightmares in this group.