The related neuropeptides vasoactive intestinal peptide (VIP) and peptide histidine isoleucine (PHI) are expressed at high levels in the neurons of the suprachiasmatic nucleus (SCN), but their function in the regulation of circadian rhythms is unknown. To study the role of these peptides on the circadian system in vivo, a new mouse model was developed in which both VIP and PHI genes were disrupted by homologous recombination. In a light-dark cycle, these mice exhibited diurnal rhythms in activity which were largely indistinguishable from wild-type controls. In constant darkness, the VIP/PHI-deficient mice exhibited pronounced abnormalities in their circadian system. The activity patterns started approximately 8 h earlier than predicted by the previous light cycle. In addition, lack of VIP/PHI led to a shortened free-running period and a loss of the coherence and precision of the circadian locomotor activity rhythm. In about one-quarter of VIP/PHI mice examined, the wheel-running rhythm became arrhythmic after several weeks in constant darkness. Another striking example of these deficits is seen in the split-activity patterns expressed by the mutant mice when they were exposed to a skeleton photoperiod. In addition, the VIP/PHI-deficient mice exhibited deficits in the response of their circadian system to light. Electrophysiological analysis indicates that VIP enhances inhibitory synaptic transmission within the SCN of wild-type and VIP/PHI-deficient mice. Together, the observations suggest that VIP/PHI peptides are critically involved in both the generation of circadian oscillations as well as the normal synchronization of these rhythms to light.