The phytochrome (phy) family of sensory photoreceptors transduce informational light signals to selected nuclear genes, inducing plant growth and developmental responses appropriate to the environment. Existing data suggest that one signaling pathway by which this occurs involves direct, intranuclear interaction of the photoactivated phy molecule with PIF3, a basic helix-loop-helix transcription factor. Here, we provide evidence from recently identified pif3 mutant alleles that PIF3 is necessary for early chloroplast greening and rapid phy-induced expression of nuclear genes encoding chloroplast components upon first exposure of seedlings to light. Therefore, these data indicate that PIF3 functions to transduce phy signals to genes involved in a critical facet of the early seedling deetiolation process, the generation of a functional photosynthetic apparatus. When transgenically expressed GUS:PIF3 fusion protein constructs were used, we found that PIF3 protein levels are rapidly and reversibly modulated by the photoreceptor over diurnal cycles in Arabidopsis seedlings. The PIF3 protein declines rapidly to a basal steady-state level upon initial light exposure, but reaccumulates to preirradiation levels in darkness during the subsequent night period. These data suggest that PIF3 may function in early phy signaling at the dark-to-light transition, not only during initial seedling deetiolation, but daily at dawn under diurnal light-dark cycles.