A circadian pacemaker consists of at least three essential features: the ability to generate circadian oscillations, an output signal, and the ability to be entrained by external signals. In rodents, ablation of the suprachiasmatic nucleus (SCN) results in the loss of circadian rhythms in activity. Rhythmicity can be restored by transplanting fetal SCN into the brain of the lesioned animal, demonstrating the first two of the essential pacemaker features within the grafts. External signals, such as the light/dark cycle, have not, however, been shown to entrain the restored rhythms. Melatonin injections are an effective entraining stimulus in fetal and neonatal Syrian hamsters of the same developmental ages used to provide donor tissue for transplantation. Therefore, melatonin was used to test the hypothesis that SCN grafts contain an entrainable pacemaker. Daily injections of melatonin were given to SCN-lesioned hosts beginning on the day after transplantation of fetal SCN. Two groups that received melatonin at different times of day 12 hr apart each showed significantly clustered phases but with average phases that differed by 8.67 hr. Thus melatonin was able to entrain the restored circadian activity rhythms. In contrast to these initial injections, injections given 6 weeks after transplantation were unable to entrain or phase shift the rhythms. The results demonstrate that SCN grafts contain an entrainable circadian pacemaker. In addition, the results also indicate that the fetal SCN is directly sensitive to melatonin and, as with intact hamsters, sensitivity to melatonin is lost during SCN development.