Melatonin is synthesized in retinal photoreceptor cells and acts as a neuromodulator imparting photoperiodic information to the retina. The synthesis of melatonin is controlled by an ocular circadian clock and by light in a finely tuned mechanism that ensures that melatonin is synthesized and acts only at night in darkness. Here we report that the circadian clock gates melatonin synthesis in part by regulating the expression of the type 1 adenylyl cyclase (AC1) and the synthesis of cAMP in photoreceptor cells. This gating is effected through E-box-mediated transcriptional activation of the AC1 gene, which undergoes robust daily fluctuations that persist in constant illumination. The circadian control of the cAMP signaling cascade indicates that the clock has a more general and profound impact on retinal functions than previously thought. In addition, rhythmic control of AC1 expression was observed in other parts of the central circadian axis, the suprachiasmatic nucleus and pineal gland, but not in other brain areas examined. Thus, clock control of the cAMP signaling cascade may play a central role in the integration of circadian signals that control physiology and behavior.