Since 1960, magnetic fields have been discussed as Zeitgebers for circadian clocks, but the mechanism by which clocks perceive and process magnetic information has remained unknown. Recently, the radical-pair model involving light-activated photoreceptors as magnetic field sensors has gained considerable support, and the blue-light photoreceptor cryptochrome (CRY) has been proposed as a suitable molecule to mediate such magnetosensitivity. Since CRY is expressed in the circadian clock neurons and acts as a critical photoreceptor of Drosophila's clock, we aimed to test the role of CRY in magnetosensitivity of the circadian clock. In response to light, CRY causes slowing of the clock, ultimately leading to arrhythmic behavior. We expected that in the presence of applied magnetic fields, the impact of CRY on clock rhythmicity should be altered. Furthermore, according to the radical-pair hypothesis this response should be dependent on wavelength and on the field strength applied. We tested the effect of applied static magnetic fields on the circadian clock and found that flies exposed to these fields indeed showed enhanced slowing of clock rhythms. This effect was maximal at 300 muT, and reduced at both higher and lower field strengths. Clock response to magnetic fields was present in blue light, but absent under red-light illumination, which does not activate CRY. Furthermore, cry(b) and cry(OUT) mutants did not show any response, and flies overexpressing CRY in the clock neurons exhibited an enhanced response to the field. We conclude that Drosophila's circadian clock is sensitive to magnetic fields and that this sensitivity depends on light activation of CRY and on the applied field strength, consistent with the radical pair mechanism. CRY is widespread throughout biological systems and has been suggested as receptor for magnetic compass orientation in migratory birds. The present data establish the circadian clock of Drosophila as a model system for CRY-dependent magnetic sensitivity. Furthermore, given that CRY occurs in multiple tissues of Drosophila, including those potentially implicated in fly orientation, future studies may yield insights that could be applicable to the magnetic compass of migratory birds and even to potential magnetic field effects in humans.