Melatonin synthesis in retinal photoreceptors is under photic and circadian control and is regulated primarily by changes in the activity of arylalkylamine N-acetyltransferase (AANAT). Previous investigations demonstrated that Aanat transcripts are predominantly expressed in the photoreceptor cells. AANAT activity is high at night and low during the day, and illumination of the retina during the night induces rapid reduction in the activity of this enzyme. The enzyme is subject to both transcriptional and post-translational regulatory mechanisms. AANAT transcription is regulated directly by the circadian clock via the E-box present in the promoter region of the gene; the photic environment and circadian clock also influence AANAT transcription via cAMP-responsive elements. The stability of AANAT is regulated by cAMP, and light, which decreases cAMP levels in photoreceptor cells, results in rapid degradation of AANAT protein by proteasomal proteolysis. The circadian rhythm in the levels of Aanat mRNA in the rat retina persists after the suprachiasmatic nucleus (SCN) of the hypothalamus has been lesioned, indicative of its relative independence from the master clock in the brain. In non-mammalian vertebrates, the retinal clock controlling melatonin synthesis is in photoreceptor cells, but it has not been definitively localized in mammals. Several studies have also shown that dopamine plays an important role in the regulation of AANAT activity by acting via D2/D4-like receptors that are present on the photoreceptors. Finally, it is important to mention that AANAT, in addition to its role in melatonin synthesis, may play a detoxification role in the vertebrate retina by acetylating arylalkylamines that may react with retinaldehyde.