The eye of the opisthobranch mollusc Bulla gouldiana expresses a circadian rhythm in optic nerve impulse frequency. The circadian rhythm is generated among approximately 100 neurons at the base of the retina referred to as basal retinal neurons. These cells are electrically coupled to one another and fire spontaneous action potentials in synchrony. Basal retinal neurons recorded intracellularly exhibit a circadian rhythm in membrane potential that appears to be driven by a circadian modulation of membrane conductance. Membrane conductance is relatively high during the subjective night and decreases after subjective dawn. Recent experiments in our laboratory indicate that individual basal retinal neurons in culture can express circadian rhythms in membrane conductance. When completely isolated, these cells continue to show circadian conductance changes. These studies provide the first direct demonstration that individual neurons can act as circadian pacemakers. Although the precise details of the mechanism generating the circadian periodicity remain obscure, our research indicates that several transmembrane ionic fluxes are not involved in rhythm generation, but that a transmembrane Ca2+ flux is critical for entrainment. Both transcription and translation appear to play critical roles in generating the circadian cycle.