Many sleep aids contain L-Theanine, which is an amino acid extracted from tea leaves.  When viewed on an EEG, the brain waves on L-theanine is smoothed out. [reference]

Article on PubMed says that it significantly increase alpha wave activity.  The brains alpha wave naturally increases during wakeful relaxation with closed eyes. Alpha waves naturally are reduced with open eyes, drowsiness and sleep — according to Wikipedia.

It is believed that this pre-sleep relaxation helps with insomnia.  One study found that although L-Theanine did not cause the subject to sleep longer, they sleep better.

Also interesting is that Wikipedia says that …

“Theanine increases serotonin, dopamine, GABA, and glycine levels in various areas of the brain, as well as BDNF and NGF levels in certain brain areas.”

and that L-theanine is able to cross the blood-brain barrier.   While some of this may be controversial, a PubMed article seems to corroborate and also says that L-Theanine may be neuro-protective as well.

Theanine is similar in structure to the amino acid glutamate, which is an excitatory neurotransmitter.  Theanine can bind to glutamate receptors and …

“it binds to ionotropic glutamate receptors in the micromolar range, including the AMPA and kainate receptors and, to a lesser extent, the NMDA receptor…. It acts as an antagonist of the former two sites… and as an agonist of the latter site.” [source]

L-Theanine is not suitable for everyone or every condition and can have drug interactions.  Check with your doctor before taking for short-term use.