The CNS is both source and target of melatonin. This methoxyindole formed in the pineal gland is also produced in other CNS regions and additionally enters the brain by uptake from the circulation as well as via the pineal recess. The mammalian circadian pacemaker, the suprachiasmatic nucleus (SCN), not only controls the pineal, but also receives a feedback information on darkness. Two G protein-coupled melatonin receptors, MT1 and MT2, are responsible for the transduction of many melatonergic actions. High receptor densities are especially found in the SCN, but their presence at lower expression levels in other areas is functionally important. Various metabolites and analogs are formed in the CNS, such as N-acetylserotonin, 5-methoxytryptamine, 5-methoxytryptophol, 5-methoxylated kynuramines, and even 6-sulfatoxymelatonin. The chronobiological effects of melatonin go beyond the resetting of a single circadian oscillator. They contribute to phase relationships between oscillatory subsets and are required for robust rhythm amplitudes. CNS effects of melatonin comprise sleep initiation, antiexcitatory, antiepileptic, antinociceptive, anxiolytic, proneurotrophic, antiinflammatory, antioxidant and other neuroprotective actions. The role as a sleep-promoting compound, which is limited by its short half-life in the circulation, has led to the development of controlled-release formulations and of various synthetic agonists, such as ramelteon, agomelatine, tasimelteon, TIK-301, UCM765 and UCM924. Their differences concerning receptor affinities, preferences for receptor subtypes, and pharmacokinetics are discussed, as well as additional antidepressive actions of agomelatine and TIK-301 based on properties as antagonists of the serotonergic 5-HT2C receptor. Indirect antidepressive effects by melatonergic drugs are largely explained by circadian readjustments.