The activity of hundreds of genes was altered when people's sleep was cut to less than six hours a day for a week.
Writing in the journal PNAS, the researchers said the results helped explain how poor sleep damaged health.
Heart disease, diabetes, obesity and poor brain function have all been linked to substandard sleep.
What missing hours in bed actually does to alter health, however, is unknown.
So researchers at the University of Surrey analysed the blood of 26 people after they had had plenty of sleep, up to 10 hours each night for a week, and compared the results with samples after a week of fewer than six hours a night.
More than 700 genes were altered by the shift. Each contains the instructions for building a protein, so those that became more active produced more proteins - changing the chemistry of the body.
Sources: Mental Health Foundation and BBC Science
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Meanwhile the natural body clock was disturbed - some genes naturally wax and wane in activity through the day, but this effect was dulled by sleep deprivation.
Prof Colin Smith, from the University of Surrey, told the BBC: "There was quite a dramatic change in activity in many different kinds of genes."
Areas such as the immune system and how the body responds to damage and stress were affected.
Prof Smith added: "Clearly sleep is critical to rebuilding the body and maintaining a functional state, all kinds of damage appear to occur - hinting at what may lead to ill health.
"If we can't actually replenish and replace new cells, then that's going to lead to degenerative diseases."
He said many people may be even more sleep deprived in their daily lives than those in the study - suggesting these changes may be common.
Dr Akhilesh Reddy, a specialist in the body clock at the University of Cambridge, said the study was "interesting".
He said the key findings were the effects on inflammation and the immune system as it was possible to see a link between those effects and health problems such as diabetes.
The findings also tie into research attempting to do away with sleep, such as by finding a drug that could eliminate the effects of sleep deprivation.
Dr Reddy said: "We don't know what the switch is that causes all these changes, but theoretically if you could switch it on or off, you might be able to get away without sleep.
"But my feeling is that sleep is fundamentally important to regenerating all cells."
A run of poor sleep can have a potentially profound effect on the internal workings of the human body, say UK researchers.