Mammalian CLOCK(NPAS2), BMAL1 and CRYPTOCHROMEs are core components of the circadian oscillatory mechanism. The active CLOCK/BMAL1 or NPAS2/BMAL1 complexes regulate expression of numerous genes including two Cryptochromes. The products of these genes, CRY1 and CRY2, in turn repress CLOCK/BMAL1 transcriptional activity by an unknown mechanism. We have examined the effect of CRYPTOCHROMEs on posttranslational modifications and intracellular distribution of endogenous and ectopically expressed CLOCK(NPAS2) and BMAL1 proteins. We found that ectopic coexpression with CRY led to stabilization and nuclear accumulation of unphosphorylated forms of the proteins, which directly correlated with the inhibition of their transcriptional activity. This effect was CRY-specific, as other known repressors of CLOCK/BMAL1 and NPAS2/ BMAL1 transcriptional activity were not able to induce similar effects. CRYs had no effect on CLOCK(NPAS2)/BMAL1 complex formation or its ability to bind DNA. Altogether, these results demonstrate that CRYs regulate the functional activity of circadian transcriptional complex at the posttranslational level. Importantly, the posttranslational modifications and intracellular distribution of CLOCK and BMAL1 proteins were critically impaired in the tissues of mice with targeted disruption of both Cry genes, thus confirming the suggested role of CRY in clock function in vivo. Based on these findings we propose a modified model of the circadian transcriptional control, which implies CRY-mediated periodic rotation of transcriptionally active and inactive forms of CLOCK/BMAL1 on the promoter. This model provides mechanistic explanation for previously reported dual functional activity of CLOCK/BMAL1 and highlights the involvement of the circadian system in modulating the organism's response to various types of genotoxic stress, including chemotherapy and radiation.