The research team led by Universite de Montreal found that 30 percent of children in the age group 6 months to six years have difficulties sleeping six consecutive hours - either because they can't fall into slumber or they can't stay asleep.
They found that one-quarter of sleepless kids could become overweight and hyperactive.
This is due to a change in the secretion of hormones that's brought on by lack of sleep.
Jacques Montplaisir, a professor in the Department of Psychiatry and director of Sleep Disorders Center at Sacré-Coeur Hospital said that 26 percent of children that sleep fewer than 10 hours a night between two and half years and six years are overweight.
The figure drops to 15 percent of those that sleep 10 hours and falls to 10 percent among those that sleep 11 hours.
"When we sleep less, our stomach secretes more of the hormone that stimulates appetite," said Montplaisir.
"And we also produce less of the hormone whose function is to reduce the intake of food," he added.
The research team analysed a sample of 1,138 children and found: 26 percent of kids who didn't sleep enough were overweight, 18.5 percent carried extra weight, while 7.4 percent were obese.
Inadequate sleep could also lead to hyperactivity. The study showed that 22 percent of children who slept fewer than 10 hours at age two and a half suffered hyperactivity at six years old, which is twice the rate seen in those who slept 10 to 11 hours per night.
Children were also given a cognitive performance test in which they had to copy a picture using blocks of two colours.
Among the children who lacked sleep, 41 percent did poorly, whereas only 17 to 21 percent of children with 10 or 11 hours of sleep per night performed badly.