Answer by Christopher Maloney:
Think of melatonin as a direct sedating agent that already appears in the body's biochemical cascade. Melatonin has "direct inhibitory effects…upon several ACTH responses in the human adrenal gland"Insomniacs tend to have a higher level of ACTH and arousal. So by opposing arousal, melatonin can aid in falling asleep.
In a study of athletes (taking 100 mg of melatonin daily) melatonin "reduced the nocturnal activity and the activity and position during lunch/nap time." Melatonin also provided the athletes with: "a longer nocturnal steady state and a smaller reduction when arising at morning." By increasing sleep efficiency, melatonin can decrease the time needed to reach the necessary amount of sleep.