The circadian oscillator generates a rhythmic output with a period of about 24 hours. Despite extensive studies in several model systems, the biochemical mode of action has not yet been demonstrated for any of its components. Here, the Drosophila CLOCK protein was shown to induce transcription of the circadian rhythm genes period and timeless. dCLOCK functioned as a heterodimer with a Drosophila homolog of BMAL1. These proteins acted through an E-box sequence in the period promoter. The timeless promoter contains an 18-base pair element encompassing an E-box, which was sufficient to confer dCLOCK responsiveness to a reporter gene. PERIOD and TIMELESS proteins blocked dCLOCK's ability to transactivate their promoters via the E-box. Thus, dCLOCK drives expression of period and timeless, which in turn inhibit dCLOCK's activity and close the circadian loop.

Most organisms have circadian clocks consisting of negative feedback loops of gene regulation that facilitate adaptation to cycles of light and darkness. In this study, CRYPTOCHROME (CRY), a protein involved in circadian photoperception in Drosophila, is shown to block the function of PERIOD/TIMELESS (PER/TIM) heterodimeric complexes in a light-dependent fashion. TIM degradation does not occur under these conditions; thus, TIM degradation is uncoupled from abrogation of its function by light. CRY and TIM are part of the same complex and directly interact in yeast in a light-dependent fashion. PER/TIM and CRY influence the subcellular distribution of these protein complexes, which reside primarily in the nucleus after the perception of a light signal. Thus, CRY acts as a circadian photoreceptor by directly interacting with core components of the circadian clock.