Neuronal PAS domain protein 2 (NPAS2) is a mammalian transcription factor that binds DNA as an obligate dimeric partner of BMAL1 and is implicated in the regulation of circadian rhythm. Here we show that both PAS domains of NPAS2 bind heme as a prosthetic group and that the heme status controls DNA binding in vitro. NPAS2-BMAL1 heterodimers, existing in either the apo (heme-free) or holo (heme-loaded) state, bound DNA avidly under favorably reducing ratios of the reduced and oxidized forms of nicotinamide adenine dinucleotide phosphate. Low micromolar concentrations of carbon monoxide inhibited the DNA binding activity of holo-NPAS2 but not that of apo-NPAS2. Upon exposure to carbon monoxide, inactive BMAL1 homodimers were formed at the expense of NPAS2-BMAL1 heterodimers. These results indicate that the heterodimerization of NPAS2, and presumably the expression of its target genes, are regulated by a gas through the heme-based sensor described here.