Haploinsufficiency of RAI1 results in Smith-Magenis syndrome (SMS), a disorder characterized by intellectual disability, multiple congenital anomalies, obesity, neurobehavioral abnormalities, and a disrupted circadian sleep-wake pattern. An inverted melatonin rhythm (i.e., melatonin peaks during the day instead of at night) and associated sleep-phase disturbances in individuals with SMS, as well as a short-period circadian rhythm in mice with a chromosomal deletion of Rai1, support SMS as a circadian-rhythm-dysfunction disorder. However, the molecular cause of the circadian defect in SMS has not been described. The circadian oscillator temporally orchestrates metabolism, physiology, and behavior largely through transcriptional modulation. Data support RAI1 as a transcriptional regulator, but the genes it might regulate are largely unknown. Investigation into the role that RAI1 plays in the regulation of gene transcription and circadian maintenance revealed that RAI1 regulates the transcription of circadian locomotor output cycles kaput (CLOCK), a key component of the mammalian circadian oscillator that transcriptionally regulates many critical circadian genes. Data further show that haploinsufficiency of RAI1 and Rai1 in SMS fibroblasts and the mouse hypothalamus, respectively, results in the transcriptional dysregulation of the circadian clock and causes altered expression and regulation of multiple circadian genes, including PER2, PER3, CRY1, BMAL1, and others. These data suggest that heterozygous mutation of RAI1 and Rai1 leads to a disrupted circadian rhythm and thus results in an abnormal sleep-wake cycle, which can contribute to an abnormal feeding pattern and dependent cognitive performance. Finally, we conclude that RAI1 is a positive transcriptional regulator of CLOCK, pinpointing a novel and important role for this gene in the circadian oscillator.