Frequent bad dreams and night terrors can increase the risk of children suffering psychosis, a study has shown.
At 12 years old, nightmares more than tripled the occurrence of psychotic symptoms such as hallucinations and delusions, researchers found.
Night terrors, marked by sudden panic or fear during deep sleep, almost doubled the risk.
In younger children, a greater risk of early adolescent psychosis was associated with having more nightmares.
Children aged two to nine who were most plagued by bad dreams were 56% more likely to experience later episodes of psychosis than those whose sleep was undisturbed.
Scientists reassured parents that nightmares were common in young children, who usually grew out of them.
Lead researcher Professor Dieter Wolke, from the University of Warwick, said: "We certainly don't want to worry parents with this news; three in every four children experience nightmares at this young age.
"However, nightmares over a prolonged period or bouts of night terrors that persist into adolescence can be an early indicator of something more significant in later life."
More than 6,700 children were recruited for the study, part of a wide-ranging health investigation called the Avon Longitudinal Study of Parents and Children (Alspac).
By the age of 12, around one in four reported having nightmares in the previous six months, with fewer than one in 10 experiencing night terrors.
Nightmares and night terrors are often confused but very different forms of sleep disturbance.
The former tend to occur during the shallower REM (rapid eye movement) part of the sleep cycle, when most dreaming takes place.
Night terrors happen during deep sleep, typically causing the unaware sleeper to sit bolt upright in a panicked state, thrash about or scream.
The children were assessed six times between the ages of two and nine. Higher rates of nightmares during this period were found to increase the likelihood of psychosis.
Children who reported persistent nightmares at only one of the assessment time points were 16% more likely to experience adolescent psychotic episodes than those who had no nightmares.
Three or more nightmare periods were associated with a 56% increased risk.
At 12 years of age the risk of psychosis was more than tripled by having nightmares and almost doubled by night terrors.
Lucie Russell, from the charity YoungMinds, which campaigns to improve the mental health of children and young people, said: "This is a very important study because anything that we can do to promote early identification of signs of mental illness is vital to help the thousands of children that suffer.
"Early intervention is crucial to help avoid children suffering entrenched mental illness when they reach adulthood."