The molecular mechanisms controlling the oscillatory synthesis of melatonin in rat pineal gland involve the rhythmic expression of several genes including arylalkylamine N-acetyltransferase (AA-NAT), inducible cAMP early repressor (ICER), and Fos-related antigen-2 (fra-2). Here we show that the calcium sensors downstream regulatory element antagonist modulator/potassium channel interacting protein (DREAM/KChIP)-3 and KChIP-1, -2 and -4 bind to downstream regulatory element (DRE) sites located in the regulatory regions of these genes and repress basal and induced transcription from ICER, fra-2 or AA-NAT promoters. Importantly, we demonstrate that the endogenous binding activity to DRE sites shows day-night oscillations in rat pineal gland and retina but not in the cerebellum. The peak of DRE binding activity occurs during the day period of the circadian cycle, coinciding with the lowest levels of fra-2, ICER, and AA-NAT transcripts. We show that a rapid clearance of DRE binding activity during the entry in the night period is related to changes at the posttranscriptional level of DREAM/KChIP. The circadian pattern of DREAM/KChIP activity is maintained under constant darkness, indicating that an endogenous clock controls DREAM/KChIP function. Our data suggest involvement of the family of DREAM repressors in the regulation of rhythmically expressed genes engaged in circadian rhythms.