Circadian rhythms have been shown both in the expression of the period (per) gene in 'lateral neurons' and in cells of the outermost neuropil, or lamina, of the fly's optic lobe. Some lateral neurons also exhibit PDH peptide-like immunoreactivity, arborizing widely throughout the optic lobe. Using confocal microscopy in the housefly, we analysed the size and spacing of PDH neurite varicosities, sites of possible peptide release exhibiting circadian rhythmicity. During the subjective day in constant darkness, there were fewer, larger varicosities than during subjective night. The endogenous rhythm was masked by the light exposure that occurred under a day-night cycle and continuous light conditions. Our findings indicate that PDH neurites convey circadian information out from the pacemaker, where they could regulate the circadian rhythms that have been described in the lamina, possibly via cyclical release of their peptide.