Background: In animals, neuropeptide signaling is an important component of circadian timekeeping. The neuropeptide pigment dispersing factor (PDF) is required for several aspects of circadian activity rhythms in Drosophila. Methodology/Principal Findings: Here we investigate the anatomical basis for PDF's various circadian functions by targeted PDF RNA-interference in specific classes of Drosophila neuron. We demonstrate that PDF is required in the ventro- lateral neurons (vLNs) of the central brain and not in the abdominal ganglion for normal activity rhythms. Differential knockdown of PDF in the large or small vLNs indicates that PDF from the small vLNs is likely responsible for the maintenance of free-running activity rhythms and that PDF is not required in the large vLNs for normal behavior. PDF's role in setting the period of free-running activity rhythms and the proper timing of evening activity under light:dark cycles emanates from both subtypes of vLN, since PDF in either class of vLN was sufficient for these aspects of behavior. Conclusions/Significance: These results reveal the neuroanatomical basis PDF's various circadian functions and refine our understanding of the clock neuron circuitry of Drosophila.