As in mammals, Drosophila circadian clock neurons display rhythms of activity with higher action potential firing rates and more positive resting membrane potentials during the day. This rhythmic excitability has been widely observed but, critically, its regulation remains unresolved. We have characterized and modelled the changes underlying these electrical activity rhythms in the lateral ventral clock neurons (LNvs). We show that currents mediated by the voltage‐gated potassium channels Shaw (Kv3) and Shal (Kv4) oscillate in a circadian manner. Disruption of these channels, by expression of dominant negative (DN) subunits, leads to changes in circadian locomotor activity and shortens lifespan. LNv whole‐cell recordings then show that changes in Shaw and Shal currents drive changes in action potential firing rate and that these rhythms are abolished when the circadian molecular clock is stopped. A whole‐cell biophysical model using Hodgkin‐Huxley equations can recapitulate these changes in electrical activity. Based on this model and by using dynamic clamp to manipulate clock neurons directly, we can rescue the pharmacological block of Shaw and Shal, restore the firing rhythm, and thus demonstrate the critical importance of Shaw and Shal. Together, these findings point to a key role for Shaw and Shal in controlling circadian firing of clock neurons and show that changes in clock neuron currents can account for this. Moreover, with dynamic clamp we can switch the LNvs between morning‐like and evening‐like states of electrical activity. We conclude that changes in Shaw and Shal underlie the daily oscillation in LNv firing rate.