The circadian secretion of melatonin by the pineal gland and retinae is a direct output of circadian oscillators and of the circadian system in many species of vertebrates. This signal affects a broad array of physiological and behavioral processes, making a generalized hypothesis for melatonin function an elusive objective. Still, there are some common features of melatonin function. First, melatonin biosynthesis is always associated with photoreceptors and/or cells that are embryonically derived from photoreceptors. Second, melatonin frequently affects the perception of the photic environment and has as its site of action structures involved in vision. Finally, melatonin affects overt circadian function at least partially via regulation of the hypothalamic suprachiasmatic nucleus (SCN) or its homologues. The mechanisms by which melatonin affects circadian rhythms and other downstream processes are unknown, but they include interaction with a class of membrane-bound receptors that affect intracellular processes through guanosine triphosphate (GTP)-binding protein second messenger systems. Investigation of mechanisms by which melatonin affects its target tissues may unveil basic concepts of neuromodulation, visual system function, and the circadian clock.