The suprachiasmatic nuclei of the anterior hypothalamus serve as the principal pacemaker of the mammalian circadian system. Among its efferent targets are the habenular nucleus (Hb), especially the lateral Hb (LHb), which plays an important role in conveying input from the limbic forebrain to midbrain structures. We recorded extracellularly from single neurons in the LHb and medial Hb (MHb), both in vivo and using an in vitro slice preparation, to assess their responses to retinal illumination and the rhythmicity of their firing rates. Of cells recorded in the LHb, 42% were tonically activated or suppressed by retinal illumination, while significantly fewer cells recorded in the MHb responded to retinal illumination (19%). Of photically responsive cells, 68% in the LHb were activated and the remainder suppressed, while only 25% of those recorded in the MHb were activated. Cells in both the LHb and MHb showed higher baseline firing rates during the day than during the night in vivo, while photic responses were of significantly larger amplitude among LHb cells during the projected night than during the projected day. LHb cells recorded in vitro maintained their rhythmicity for two circadian cycles, but MHb cells did not show a rhythm in vitro. The habenula may play a role in linking circadian and motivational systems and may contribute to photic regulation of these systems, as well as to the rhythmicity of their function.