Circadian rhythms of locomotor activity and eclosion in Drosophila depend upon the reciprocal autoregulation of the period (per) and timeless (tim) genes. As part of this regulatory loop, per and tim mRNA levels oscillate in a circadian fashion. Other cycling transcripts may participate in this central pacemaker mechanism or represent outputs of the clock. In this paper, we report the isolation of Crg-1, a new circadianly regulated gene. Like per and tim transcript levels, Crg-1 transcript levels oscillate with a 24 h period in light:dark (LD) conditions, with a maximal abundance at the beginning of the night. These oscillations persist in complete darkness and depend upon per and tim proteins. The putative CRG-1 proteins show some sequence similarity with the DNA-binding domain of the HNF3/fork head family of transcription factors. In the adult head, in situ hybridization analysis reveals that per and Crg-1 have similar expression patterns in the eyes and optic lobes.