From Latin *somnus* ("sleep"), via the Vulgar Latin form *somnium* ("dream"). The Latin root is related to Greek *hýpnos* (sleep), and both trace back to Proto-Indo-European *swep- ("to sleep"). The shift from Latin *somn-* to Spanish *sueñ-* reflects regular sound changes: the diphthongization of short /o/ to /ue/ and palatalization of *-mn-* to /ɲ/.

*Sueño* beautifully carries two meanings at once — literal sleep and a cherished dream or aspiration — just as English "dream" does. You'll often hear *tengo sueño* (I'm sleepy) vs. *tengo un sueño* (I have a dream/aspiration). The phrase *el sueño americano* (the American Dream) is widely understood throughout the Spanish-speaking world. In literary Spanish, *sueño* also evokes the famous line by Calderón de la Barca: *"La vida es sueño"* — "Life is a dream."