The retinal and anterior neural fold homeobox gene (Rax) controls development of the eye and the forebrain. Postnatal expression of Rax in the brain is restricted to the pineal gland, a forebrain structure devoted to melatonin synthesis. The role of Rax in pineal function is unknown. In order to investigate the role of Rax in pineal function while circumventing forebrain abnormalities of the global Rax knockout, we generated an eye and pineal-specific Rax conditional knockout mouse. Deletion of Rax in the pineal gland did not affect morphology of the gland, suggesting that Rax is not essential for pineal gland development. In contrast, deletion of Rax in the eye generated an anophthalmic phenotype. In addition to the loss of central visual pathways, the suprachiasmatic nucleus of the hypothalamus housing the circadian clock was absent, indicating that the retinohypothalamic tract is required for the nucleus to develop. Telemetric analyses confirmed the lack of a functional circadian clock. Arylalkylamine N-acetyltransferase (Aanat) transcripts, encoding the melatonin rhythm-generating enzyme, were undetectable in the pineal gland of the Rax conditional knockout under normal conditions, whereas the paired box 6 homeobox gene, known to regulate pineal development, was up-regulated. By injecting isoproterenol, which mimics a nocturnal situation in the pineal gland, we were able to induce pineal expression of Aanat in the Rax conditional knockout mouse, but Aanat transcript levels were significantly lower than those of Rax-proficient mice. Our data suggest that Rax controls pineal gene expression and via Aanat may modulate melatonin synthesis.