Short sleep duration is a known risk to health, but less certain is the impact of longer sleep duration on various measures of health. We investigated the relationship between sleep duration and mental health outcomes in a cross-sectional survey conducted on a homogenous sample of healthy governmental employees (N = 1212). Data on sleep duration, subjective health, psychological stress, sense of coherence, life satisfaction and work ability along with sociodemographic data were collected. Sleep duration was significantly longer, and mental health outcomes and work ability were significantly better among those in at least good subjective health. Fitting mental health outcomes on sleep duration suggested a quadratic or fractional polynomial function, therefore these were tested and the best-fitting models were selected. Longer than 8 h of sleep duration was associated with a decreasing sense of coherence and decreasing work ability. However, psychological stress and life satisfaction were positively impacted by more than 8 h of sleep. Sleep duration likely has an optimum range for health, similar to other variables reflecting homeostatic functions. However, this is difficult to prove due to the left-skewed distribution of sleep duration.