Sleep quality changes dramatically from young to old age, but its effects on brain dynamics and cognitive functions are not yet fully understood. We tested the hypothesis that a shift in brain networks dynamics relates to sleep quality and cognitive performance across the lifespan. Network dynamics were assessed using Hidden Markov Models (HMMs) in resting-state MEG data from a large cohort of population-based adults (N = 564, aged 18-88). Using multivariate analyses of brain-sleep profiles and brain-cognition profiles, we found an age-related "neural shift," expressed as decreased occurrence of "lower-order" brain networks coupled with increased occurrence of "higher-order" networks. This "neural shift" was associated with both increased sleep dysfunction and decreased fluid intelligence, and this relationship was not explained by age, sex or other covariates. These results establish the link between poor sleep quality, as evident in aging, and a behavior-related shift in neural dynamics.