Serotonin-N-acetyltransferase (arylalkylamine-N-acetyltransferase, AANAT) is the key enzyme in the generation of melatonin rhythms in the pineal gland and retinal photoreceptors. Rhythmic AANAT activity drives rhythmic melatonin production in these tissues. Two AANATs, AANAT1 and AANAT2, are present in teleost fish species. Different spatial expression patterns, enzyme kinetics and substrate preferences suggest that they may have different functions. Enzyme activity assays revealed that recombinant seabream and zebrafish AANAT1s, but not AANAT2s, acetylate dopamine with kinetic characteristics that are similar to those for tryptamine acetylation. High performance liquid chromatography analysis of seabream retinal extracts indicated the presence of N-acetyldopamine. Time-of-day analysis of retinal AANAT activity and concentration of melatonin, dopamine, 3,4-dihydroxyphenylacetic acid (DOPAC) and N-acetyldopamine revealed a daily pattern of retinal melatonin and N-acetyldopamine production that are correlated with retinal AANAT1 activity. In situ hybridization analysis of seabream retinal sections indicated that tyrosine hydroxylase is expressed in the inner nuclear layer (INL) and that AANAT1 is expressed in the outer nuclear layer (ONL) and INL. Together, these observations point to the possibility that dopamine is acetylated by retinal AANAT1 in the INL. Such novel activity of AANAT1 may reflect an important function in the circadian physiology of the retina.