The circadian rhythm is a fundamental process that regulates the sleep–wake cycle. This rhythm is regulated by core clock genes that oscillate to create a physiological rhythm of circadian neuronal activity. However, we do not know much about the mechanism by which circadian inputs influence neurons involved in sleep–wake architecture. One possible mechanism involves the photoreceptor cryptochrome (CRY). In Drosophila, CRY is receptive to blue light and resets the circadian rhythm. CRY also influences membrane potential dynamics that regulate neural activity of circadian clock neurons in Drosophila, including the temporal structure in sequences of spikes, by interacting with subunits of the voltage-dependent potassium channel. Moreover, several core clock molecules interact with voltage-dependent/independent channels, channel-binding protein, and subunits of the electrogenic ion pump. These components cooperatively regulate mechanisms that translate circadian photoreception and the timing of clock genes into changes in membrane excitability, such as neural firing activity and polarization sensitivity. In clock neurons expressing CRY, these mechanisms also influence synaptic plasticity. In this review, we propose that membrane potential dynamics created by circadian photoreception and core clock molecules are critical for generating the set point of synaptic plasticity that depend on neural coding. In this way, membrane potential dynamics drive formation of baseline sleep architecture, light-driven arousal, and memory processing. We also discuss the machinery that coordinates membrane excitability in circadian networks found in Drosophila, and we compare this machinery to that found in mammalian systems. Based on this body of work, we propose future studies that can better delineate how neural codes impact molecular/cellular signaling and contribute to sleep, memory processing, and neurological disorders.