Insomnia disorder (ID) is reclassified into short-term and chronic subtypes based on recent etiological advances, however, neural mechanisms underlying the subtypes are rarely examined. In this study, we investigated gray matter volume and resting-state functional connectivity (RSFC) alterations of hippocampal subregions in short-term and chronic ID using multimodal MRI. We found convergent and divergent alterations between both ID groups in specific hippocampal subregions [right cornu ammonis 1 (CA1), subicular complex (Subc), and caudal hippocampus, (cHipp)] with prefrontal cortex [bilateral medial prefrontal cortex (MPFC), and right middle frontal gyrus] and limbic/paralimbic regions (bilateral middle cingulate cortex and left parahippocampal gyrus). Intriguingly, the RSFC of the right CA1/cHipp, particularly the intersection between these two subregions, with bilateral MPFC exhibited gradual increases from healthy controls to short-term ID and from short-term ID to chronic ID. Moreover, a negative correlation between the right CA1-left parahippocampal gyrus RSFC and Epworth Sleepiness Scale scores, and a positive correlation between the right CA1-bilateral MPFC RSFC and Insomnia Severity Index scores were found in the chronic ID group (P < 0.05). Our findings suggest convergent and divergent RSFC alterations of specific hippocampal subregions with the prefrontal cortex and limbic/paralimbic regions between short-term and chronic ID. These findings suggest that the hippocampus is a key node in establishing diagnostic and categorical biomarkers in ID and developing more effective treatment strategies.