The suprachiasmatic nucleus (SCN) is considered to be a circadian oscillator that regulates a set of physiological aspects of behavior, including sleep-wakefulness and hormone release in mammalian species, In this review, we describe recent research that has begun to reveal the functional organization of the SCN, The SCN, which consists of a bilateral pair of tiny nuclei located just above the optic chiasm, contains several kinds of peptidergic neurons, but vasoactive intestinal peptide (VIP), arginine vasopressin (AVP), and somatostatin (SOM) neurons are the main components, VIP neurons and AVP neurons show distinctly different locations in the SCN; the former are found in the ventrolateral portion, whereas the latter are localized in the dorsomedial portion, VIP neurons receive all neuronal inputs from other regions of the CNS, such as those evoked by photic stimulation via the retinal ganglion cells and those relayed by 5HT innervation from the raphe nuclei, VIP neurons relay their information to other kinds of neurons in the SCN, such as AVP and SOM neurons, VIP neurons, thus, may play a significant role in entrainment of circadian rhythm, VIP, AVP, SOM, and their mRNAs show rhythmic fluctuations that are predicted by this model; VIP and its mRNA show diurnal variation under the influence of photic stimulation, whereas AVP, SOM, and their mRNAs show endogenous rhythms, Immediate early genes (IEGs), such as c-fos mRNA, are also expressed in VIP neurons in the SCN, and IEG expression in the cells appears to be modified by photic stimuli, Together with transplantation studies showing that exogenous SCN tissue tends to restore circadian rhythm in arrhythmic animals, these results are beginning to clarify the function of the SCN in setting, maintaining, and resetting the biological clock.