Abstract: Background: Polysomnography (PSG) is considered the only reliable way to distinguish between different sleep stages. Wearable devices provide objective markers of sleep; however, these devices often rely only on accelerometer data, which do not enable reliable sleep stage detection. The alteration between sleep stages correlates with changes in physiological measures such as heart rate variability (HRV). Utilizing HRV measures may thus increase accuracy in wearable algorithms. Objective: We examined the validity of the Firstbeat sleep analysis method, which is based on HRV and accelerometer measurements. The Firstbeat method was compared against PSG in a sample of healthy adults. Our aim was to evaluate how well Firstbeat distinguishes sleep stages, and which stages are most accurately detected with this method. Methods: Twenty healthy adults (mean age 24.5 years, SD 3.5, range 20-37 years; 50% women) wore a Firstbeat Bodyguard 2 measurement device and a Geneactiv actigraph, along with taking ambulatory SomnoMedics PSG measurements for two consecutive nights, resulting in 40 nights of sleep comparisons. We compared the measures of sleep onset, wake, combined stage 1 and stage 2 (light sleep), stage 3 (slow wave sleep), and rapid eye movement (REM) sleep between Firstbeat and PSG. We calculated the sensitivity, specificity, and accuracy from the 30-second epoch-by-epoch data. Results: In detecting wake, Firstbeat yielded good specificity (0.77), and excellent sensitivity (0.95) and accuracy (0.93) against PSG. Light sleep was detected with 0.69 specificity, 0.67 sensitivity, and 0.69 accuracy. Slow wave sleep was detected with 0.91 specificity, 0.72 sensitivity, and 0.87 accuracy. REM sleep was detected with 0.92 specificity, 0.60 sensitivity, and 0.84 accuracy. There were two measures that differed significantly between Firstbeat and PSG: Firstbeat underestimated REM sleep (mean 18 minutes, P=.03) and overestimated wake time (mean 14 minutes, P<.001). Conclusions: This study supports utilizing HRV alongside an accelerometer as a means for distinguishing sleep from wake and for identifying sleep stages. The Firstbeat method was able to detect light sleep and slow wave sleep with no statistically significant difference to PSG. Firstbeat underestimated REM sleep and overestimated wake time. This study suggests that Firstbeat is a feasible method with sufficient validity to measure nocturnal sleep stage variation.