Although many biochemical, morphological and physiological processes in the vertebrate retina are controlled by a circadian (24 h) clock, the location of the clock and how the clock alters retinal function are unclear. For instance, several observations have suggested that dopamine, a retinal neuromodulator, may play an important role in retinal rhythmicity but the link between dopamine and a clock located within or outside the retina remains to be established. We found that endogenous dopamine release from isolated goldfish retinae cultured in continuous darkness for 56 h clearly exhibited a circadian rhythm with high values during the subjective day. The continuous presence of melatonin (1 nM) in the culture medium abolished the circadian rhythm of dopamine release and kept values constantly low and equal to the night-time values. The selective melatonin antagonist luzindole (1 microM) also abolished the dopamine rhythm but the values were high and equal to the daytime values. Melatonin application during the late subjective day introduced rod input and reduced cone input to fish cone horizontal cells, a state usually observed during the subjective night. In contrast, luzindole application during the subjective night decreased rod input and increased cone input. Prior application of dopamine or spiperone, a selective dopamine D(2)-like antagonist, blocked the above effects of melatonin and luzindole, respectively. These findings indicate that a circadian clock in the vertebrate retina regulates dopamine release by the activation of melatonin receptors and that endogenous melatonin modulates rod and cone pathways through dopamine-mediated D(2)-like receptor activation.