Most organisms have an endogenous circadian clock that is synchronized to environmental signals such as light and temperature. Although circadian rhythms have been described in the nematode Caenorhabditis elegans at the behavioral level, these rhythms appear to be relatively non-robust. Moreover, in contrast to other animal models, no circadian transcriptional rhythms have been identified. Thus, whether this organism contains a bona fide circadian clock remains an open question. Here we use genome-wide expression profiling experiments to identify light- and temperature-entrained oscillating transcripts in C. elegans. These transcripts exhibit rhythmic expression with temperature-compensated 24-h periods. In addition, their expression is sustained under constant conditions, suggesting that they are under circadian regulation. Light and temperature cycles strongly drive gene expression and appear to entrain largely nonoverlapping gene sets. We show that mutations in a cyclic nucleotide-gated channel required for sensory transduction abolish both light- and temperature-entrained gene expression, implying that environmental cues act cell nonautonomously to entrain circadian rhythms. Together, these findings demonstrate circadian-regulated transcriptional rhythms in C. elegans and suggest that further analyses in this organism will provide new information about the evolution and function of this biological clock.