Background: Imbalances in amount and timing of sleep are harmful to physical and mental health. Therefore, the study of the underlying mechanisms is of great biological importance. Proper timing and amount of sleep are regulated by both the circadian clock and homeostatic sleep drive. However, very little is known about the cellular and molecular mechanisms by which the circadian clock regulates sleep. In this study, we describe a novel role for diuretic hormone 31 (DH31), the fly homolog of the vertebrate neuropeptide calcitonin gene-related peptide, as a circadian wake-promoting signal that awakens the fly in anticipation of dawn. Results: Analysis of loss-of-function and gain-of-function Drosophila mutants demonstrates that DH31 suppresses sleep late at night. DH31 is expressed by a subset of dorsal circadian clock neurons that also express the receptor for the circadian neuropeptide pigment-dispersing factor (PDF). PDF secreted by the ventral pacemaker subset of circadian clock neurons acts on PDF receptors in the DH31-expressing dorsal clock neurons to increase DH31 secretion before dawn. Activation of PDF receptors in DH31-positive DN1 specifically affects sleep and has no effect on circadian rhythms, thus constituting a dedicated locus for circadian regulation of sleep. Conclusions: We identified a novel signaling molecule (DH31) as part of a neuropeptide relay mechanism for circadian control of sleep. Our results indicate that outputs of the clock controlling sleep and locomotor rhythms are mediated via distinct neuronal pathways.