Lavender really isn’t one plant – it’s 39 plants. They’re all part of the “Lamiaceae” mint family.
Lavender has several reported medical properties, and sleep is only one of them. Used in WWI as a disinfectant, it’s also used for insect bites, headaches and burns.
When used for sleep, the flower itself is infused into some hot water and the “aromatherapy” is supposed to calm and relax you. Other methods may include wrapping it in cloth and laying the bundle beneath your pillow – same effect, different strategy.
Like all of the other “natural remedies” it appears as though lavender helps you relax – which is where the sleep enhancing comes from.
Again, (this is getting repetitive) it seems to work for some people and not for others. The best strategy is to give it a try for a couple of weeks and see what happens with you.