Two genes, period (per) and timeless (tim), are essential for circadian rhythmicity in Drosophila. The encoded proteins (PER and TIM) physically interact. Here, it is shown that TIM and PER accumulate in the cytoplasm when independently expressed in cultured (S2) Drosophila cells. However, the proteins move to the nuclei of these cells if coexpressed. Domains of PER and TIM have been identified that block nuclear localization of the monomeric proteins. In vitro protein interaction studies indicate that the sequence inhibiting the nuclear accumulation of PER forms a binding site for TIM. The results indicate a mechanism for controlled nuclear localization in which suppression of cytoplasmic localization is accomplished by direct interaction of PER and TIM. No other clock functions are required for nuclear localization. The findings suggest that a checkpoint in the circadian cycle is established by requiring cytoplasmic assembly of a PER/TIM complex as a condition for nuclear transport of either protein.