In mammals, the precise circadian timing of many biological processes depends on the generation of oscillations in neural activity of pacemaker cells in the suprachiasmatic nucleus (SCN). The ionic mechanisms underlying these rhythms are largely unknown. Using the mouse brain slice preparation, we demonstrate that the magnitude of fast delayed rectifier potassium currents exhibits a diurnal rhythm that peaks during the day. Importantly, this rhythm continues in constant darkness, providing the first demonstration of the circadian regulation of an intrinsic voltage–gated current in mammalian cells. Blocking this current prevented the daily rhythm in firing rate in SCN neurons. Kv3.1b and Kv3.2 potassium channels were found to be widely distributed within the SCN with higher expression during the day. We conclude that the fast delayed rectifier is necessary for the circadian modulation of electrical activity in SCN neurons, and represents an important part of the ionic basis for the generation of rhythmic output.