Although the suprachiasmatic nucleus (SCN) is well established as providing a genetically based clock for timing circadian rhythms, the mechanisms by which the timing signal is translated into circadian rhythms of behavior and underlying physiology have only recently come to light. The bulk of the SCN outflow terminates in a column of tissue that arches upward and backward from the SCN, and which includes the subparaventricular zone (SPZ) and the dorsomedial nucleus of the hypothalamus. Neurons within the dorsal SPZ are necessary for organizing circadian rhythms of body temperature, whereas neurons in the ventral SPZ are needed for circadian rhythms of sleep and waking. Ventral SPZ neurons in turn relay to the dorsomedial nucleus, which is crucial for producing circadian rhythms of sleep and waking, locomotor activity, feeding and corticosteroid production. This multistage processor provides the animal with flexibility so that environmental cues, such as food availability, ambient temperature and social interactions, can be integrated with the clock signal to sculpt an adaptive pattern of rhythmic daily activities that maximize the chances of survival and reproduction.