The mammalian circadian clock lying in the suprachiasmatic nucleus (SCN) controls daily rhythms and synchronizes the organism to its environment. In all organisms studied, circadian timekeeping is cell-autonomous, and rhythmicity is thought to be generated by a feedback loop involving clock proteins that inhibit transcription of their own genes. In the present study, we examined how these cellular properties are organized within the SCN tissue to produce rhythmicity and photic entrainment. The results show that the SCN has two compartments regulating Period genes Per1, Per2, and Per3 mRNA expression differentially. One compartment shows endogenous rhythmicity in Per1, Per2, and Per3 mRNA expression. The other compartment does not have rhythmic mRNA expression but has gated light-induced Per1 and Per2 and high levels of endogenous nonrhythmic Per3 mRNA expression. These results reveal the occurrence of differential regulation of clock genes in two distinct SCN regions and suggest a potential mechanism for producing functional differences in distinct SCN subregions.