The circadian clock provides a link between an organism's environment and its behaviour, temporally phasing the expression of genes in anticipation of daily environmental changes. Input pathways sense environmental information and interact with the clock to synchronize it to external cycles, and output pathways read out from the clock to impart temporal control on downstream targets. Very little is known about the regulation of outputs from the clock. In Neurospora crassa, the circadian clock transcriptionally regulates expression of the clock-controlled genes, including the well-characterized eas(ccg-2) gene. Dissection of the eas(ccg-2) gene promoter previously localized a 68 bp sequence containing an activating clock element (ACE) that is both necessary and sufficient for rhythmic activation of transcription by the circadian clock. Using electrophoretic mobility shift assays (EMSAs), we have identified light-regulated nuclear protein factors that bind specifically to the ACE in a time-of-day-dependent fashion, consistent with their role in circadian regulation of expression of eas(ccg-2). Nucleotides in the ACE that interact with the protein factors were determined using interference binding assays, and deletion of the core interacting sequences affected, but did not completely eliminate, rhythmic accumulation of eas(ccg-2) mRNA in vivo, whereas deletion of the entire ACE abolished the rhythm. These data indicate that redundant binding sites for the protein factors that promote eas(ccg-2) rhythms exist within the 68 bp ACE. The ACE binding complexes formed using protein extracts from cells with lesions in central components of the Neurospora circadian clock were identical to those formed with extracts from wild-type cells, indicating that other proteins directly control eas(ccg-2) rhythmic expression. These data suggest that the Neurospora crassa circadian clock regulates an unknown transcription factor, which in turn activates the expression of eas(ccg-2) at specific times of the day.