Cutting back on sleep cuts the amount of fat volunteers lost by 50%, researchers discovered.
Skipping on sleep appears to boost production of a hormone that suppresses physical activity and fat-burning processes in the body while increasing hunger.
The study took 10 overweight but healthy volunteers for four weeks. For the first fortnight they were allowed to sleep for up to 8.5 hours, and for the second two weeks for up to 5.5 hours.
In the event they slept on average for seven hours 24 minutes in the first part and five hours and 14 minutes in the second.
When they got adequate sleep, almost half of the 6.6lb (3kg) they lost on average in that period was fat (3.1lb / 1/4kg).
But when they were sleep-restricted that proportion dropped to a fifth (1.3 lb / 0.6kg). The remainder in both cases was mainly muscle.
There was no difference in the total weight loss between the fortnightly periods.
Plamen Penev, assistant professor of medicine at Chicago University, who led the study, said: "If your goal is to lose fat, skipping sleep is like poking sticks in your bicycle wheels.
"Cutting back on sleep, a behaviour that is ubiquitous in modern society, appears to compromise efforts to lose fat through dieting. In our study it reduced fat loss by 55 per cent."
Losing sleep boosted production of a hormone called ghrelin, they discovered.
The authors of the study, published in the Annals of Internal Medicine, noted that higher levels of ghrelin have been shown to "reduce energy expenditure, stimulate hunger and food intake, promote retention of fat, and increase hepatic glucose production to support the availability of fuel to glucose dependent tissues".
"In our experiment, sleep retention was accompanied by a similar pattern of increased hunger and ... reduced oxidation of fat," they wrote.
During the sudy, the volunteers were placed on a strict diet of about 1,450 calories a day, or about 90 per cent of the amount needed to maintain a steady weight.
The academics predicted that had the dieters had access to extra food in the study - and so been able to act on their sharper hunger pangs during the sleep-restricted period - the differences in fat loss would have been even greater.
Prof Penev concluded that people "should not ignore the way they sleep when going on a diet".