To survive, organisms must adapt to a staggering diversity of environmental signals, ranging from sensory information to pathogenic infection, across the lifespan. At the same time, organisms intrinsically generate biological oscillations, such as circadian rhythms, without input from the environment. While the nervous system is well-suited to integrate extrinsic and intrinsic cues, how the brain balances these influences to shape biological function system-wide is not well understood at the molecular level. Here, we demonstrate that the cytokine receptor Fn14, previously identified as a mediator of sensory experience-dependent synaptic refinement during brain development, regulates neuronal activity and function in adult mice in a time-of-day-dependent manner. We show that a subset of excitatory pyramidal (PYR) neurons in the CA1 subregion of the hippocampus increase Fn14 expression when neuronal activity is heightened. Once expressed, Fn14 constrains the activity of these same PYR neurons, suggesting that Fn14 operates as a molecular brake on neuronal activity. Strikingly, differences in PYR neuron activity between mice lacking or expressing Fn14 were most robust at daily transitions between light and dark, and genetic ablation of Fn14 caused aberrations in circadian rhythms, sleep-wake states, and sensory-cued and spatial memory. At the cellular level, microglia contacted fewer, but larger, excitatory synapses in CA1 in the absence of Fn14, suggesting that these brain-resident immune cells may dampen neuronal activity by modifying synaptic inputs onto PYR neurons. Finally, mice lacking Fn14 exhibited heightened susceptibility to chemically induced seizures, implicating Fn14 in disorders characterized by hyperexcitation, such as epilepsy. Altogether, these findings reveal that cytokine receptors that mediates inflammation in the periphery, such as Fn14, can also play major roles in healthy neurological function in the adult brain downstream of both extrinsic and intrinsic cues.