Circadian rhythms are believed to be an evolutionary adaptation to daily environmental cycles resulting from Earth's rotation about its axis. A trait evolved through a process of natural selection is considered as adaptation; therefore, rigorous demonstration of adaptation requires evidence suggesting evolution of a trait by natural selection. Like any other adaptive trait, circadian rhythms are believed to be advantageous to living beings through some perceived function. Circadian rhythms are thought to confer advantage to their owners through scheduling of biological functions at appropriate time of daily environmental cycle (extrinsic advantage), coordination of internal physiology (intrinsic advantage), and through their role in responses to seasonal changes. So far, the adaptive value of circadian rhythms has been tested in several studies and evidence indeed suggests that they confer advantage to their owners. In this review, we have discussed the background for development of the framework currently used to test the hypothesis of adaptive significance of circadian rhythms. Critical examination of evidence reveals that there are several lacunae in our understanding of circadian rhythms as adaptation. Although it is well known that demonstrating a given trait as adaptation (or setting the necessary criteria) is not a trivial task, here we recommend some of the basic criteria and suggest the nature of evidence required to comprehensively understand circadian rhythms as adaptation. Thus, we hope to create some awareness that may benefit future studies in this direction.