Background and objectives Sleep quality and nicotine addiction are important public health issues with significant negative impacts on individual well-being and the performance of healthcare professionals. This study aims to determine the prevalence and association of nicotine dependence and poor sleep quality among residents and fellows enrolled in the Lebanese University. Methods A cross-sectional study using the snowball-sampling technique was conducted in Lebanon between January and March 2023. Data were collected through an online survey that included information on socio-demographic characteristics, nicotine dependence, and sleep quality. A total of 350 residents and fellows were included in the study. Bivariate analysis and multivariable logistic regression were carried out to identify the factors associated with sleep quality. Adjusted odds ratio and 95% confidence intervals were reported. Results One quarter (25.1%) of the residents and fellows were smokers; among them, 44.3% smoked I Quit Ordinary Smoking (IQOS), 14.8% smoked cigarettes, 10.2% smoked waterpipe (WP), 12.5% smoked cigarettes and WP, and 18.2% smoked IQOS and WP. According to the Pittsburgh Sleep Quality Index (PSQI), 34.3% of participants had poor sleep quality. Smokers had 12.5 times higher odds of experiencing poor sleep quality compared to non-smokers (adjusted odds ratio OR = 12.58 with 95% confidence interval [CI] of 7.07-22.36; p-value <0.001). In addition, smoking a combination of two types of tobacco products (cigarettes with WP or IQOS with WP) posed the highest risk of poor sleep quality, with an adjusted odds ratio of 31.54 (95% CI of 9.15-45.74, p-value <0.001). Elevated Fagerström Test for Nicotine Dependence (FTND) and Lebanon Waterpipe Dependence Scale (LWDS-11) scores indicated an increased risk of poor sleep quality (adjusted odds ratio OR = 4.69 with 95% CI of 2.179-10.10; p-value <0.001; and adjusted odds ratio OR =1.27 with 95% CI of 1.04-1.55; p-value 0.019, respectively). Conclusion Our study found a significant association between nicotine dependence and poor sleep quality among medical residents and fellows, with smokers being more susceptible to sleep disturbances. The high prevalence of IQOS smoking among medical residents and fellows in Lebanon highlights the urgent need for comprehensive research investigating the effects of heated tobacco products. Furthermore, our study reveals a critical insight into the potential additive effects of nicotine, suggesting that the concurrent use of multiple tobacco products may further elevate the risk of poor sleep quality. Recognizing the implications of our findings, it is imperative to develop targeted interventions and educational programs that promote healthier sleep habits and facilitate smoking cessation among medical residents and fellows.