In the present study we examined whether basic psychological need frustration is related to poor sleep quality and risky cholesterol levels using National Survey of Midlife Development in the United States (MIDUS) data sets. We first constructed autonomy, competence and relatedness frustration scales from the items used in the MIDUS survey and validated its factor structure in a pilot study (N = 287). An exploratory factor analysis showed that the selected items loaded on to the respective need frustration subscales of basic psychological need satisfaction and frustration scale. Next, a confirmatory factor analysis with MIDUS II data (N = 3929) provided further evidence for construct validity with a clear three factor structure. After creating the scale, we used MIDUS II and the follow-up Biomarkers study data (N = 996) to examine whether frustration of basic needs prospectively predicts poor sleep quality and risky cholesterol levels. Path analyses indicated that frustration of basic needs predicted poor subjective sleep quality after 2 years, controlling for age, gender, ethnicity, income level, suspected or confirmed heart disease, and Body Mass Index (BMI). However, data from participants who also provided objective sleep quality measures via actigraphy (N = 269) showed no direct effect of need frustration on objective sleep quality. Mediation analyses indicated that frustration of basic needs predicted poor subjective and objective sleep quality after 2 years, via anxious arousal. Regarding cholesterol outcomes, logistic regression analyses indicated that frustration of basic needs increased the odds of having risky high-density lipoprotein (HDL) levels, after controlling for age, gender, ethnicity, income level, suspected or confirmed heart disease, and Body Mass Index (BMI).