Mammalian circadian rhythms are based on transcriptional and post-translational feedback loops. Essentially, the activity of the transcription factors BMAL1 (also known as MOP3) and CLOCK is rhythmically counterbalanced by Period (PER) and Cryptochrome (CRY) proteins to govern time of day-dependent gene expression. Here we show that circadian regulation of the mouse albumin D element-binding protein (Dbp) gene involves rhythmic binding of BMAL1 and CLOCK and marked daily chromatin transitions. Thus, the Dbp transcription cycle is paralleled by binding of BMAL1 and CLOCK to multiple extra- and intragenic E boxes, acetylation of Lys9 of histone H3, trimethylation of Lys4 of histone H3 and a reduction of histone density. In contrast, the antiphasic daily repression cycle is accompanied by dimethylation of Lys9 of histone H3, the binding of heterochromatin protein 1alpha and an increase in histone density. The rhythmic conversion of transcriptionally permissive chromatin to facultative heterochromatin relies on the presence of functional BMAL1-CLOCK binding sites.