Circadian (approximately 24 h) clock regulated biological rhythms have been identified in a wide range of organisms from prokaryotic unicellular cyanobacteria to higher mammals. These rhythms regulate an enormous variety of processes including gene expression, metabolic processes, activity and reproduction. Given the widespread occurrence of circadian systems it is not surprising that extensive efforts have been directed at understanding the adaptive significance of circadian rhythms. In this review we discuss the approaches and findings that have resulted. In studies on organisms in their natural environments, some species show adaptations in their circadian systems that correlate with living at different latitudes, such as clines in circadian clock properties. Additionally, some species show plasticity in their circadian systems suggested to match the demands of their physical and social environment. A number of experiments, both in the field and in the laboratory, have examined the effects of having a circadian system that does not resonate with the organism's environment. We conclude that the results of these studies suggest that having a circadian system that matches the oscillating environment is adaptive.