We examined the transcriptional regulation of the clock-controlled arginine vasopressin gene in the suprachiasmatic nuclei (SCN). A core clock mechanism in mouse SCN appears to involve a transcriptional feedback loop in which CLOCK and BMAL1 are positive regulators and three mPeriod (mPer) genes are involved in negative feedback. We show that the RNA rhythm of each mPer gene is severely blunted in Clock/Clock mice. The vasopressin RNA rhythm is abolished in the SCN of Clock/Clock animals, leading to markedly decreased peptide levels. Luciferase reporter gene assays show that CLOCK-BMAL1 heterodimers act through an E box enhancer in the vasopressin gene to activate transcription; this activation can be inhibited by the mPER and mTIM proteins. These data indicate that the transcriptional machinery of the core clockwork directly regulates a clock-controlled output rhythm.