The study evaluated if chronic musculoskeletal (MSK) pain predicts the severity of insomnia, and whether the effect is moderated by age, gender, and number of comorbid diseases in older people. An 18-month prospective study was performed within the framework of a community health program in Hong Kong. A total of 498 older people aged ≥ 60 with multimorbidity were recruited. The predictors included the presence of chronic MSK pain, pain measured by the Brief Pain Inventory (BPI), insomnia measured by baseline Insomnia Severity Index (ISI), and number of co-morbid diseases, age, and gender. The outcome was ISI repeated at 18 months. The moderators included age, gender, and number of comorbid diseases. Multivariate linear regression and moderation analysis were conducted. We found that the presence of chronic MSK pain (β = 1.725; 95% CI, 0.607–2.842; P < 0.01) predicted the severity of ISI, after controlling for age, gender, BMI, and the number of comorbid diseases. Participants with chronic MSK pain throughout the period had worse trend of improvement in ISI compared to those who were “pain-free” (β = 2.597; 95% CI, 1.311–3.882; P < 0.001). Age, gender, and number of comorbid diseases did not moderate the longitudinal relationship. We propose that pain management should prioritized in the prevention of insomnia.