The biological clock in the suprachiasmatic nucleus (SCN) of the hypothalamus plays a well-defined role in regulating melatonin production by the pineal. Emerging evidence indicates that melatonin itself can feed back upon the SCN and thereby influence circadian functions. Melatonin administration has been shown to entrain activity rhythms in rodents and humans. Melatonin binds specifically within the SCN and alters SCN physiology by both acute and clock-resetting mechanisms. The circadian clock in the SCN appears to temporally restrict its own sensitivity to melatonin, such that physiological sensitivity is greatest in the subjective dusk period.