The basic helix–loop–helix (bHLH) –PAS domain containing transcription factors CLOCK and BMAL1 are two major components of the circadian molecular oscillator. It is known that the CLOCK/BMAL1 complex positively regulates the activity of E‐box containing promoters. Here we demonstrate that the CLOCK/BMAL1 complex can also suppress the activity of some promoters upon its interaction with CRYPTOCHROME (CRY). Such a dual function of the circadian transcriptional complex provides a mechanistic explanation for the unpredicted pattern of circadian gene expression in the tissues of Bmal1 null mice. We speculate that the switch from transcriptional activation to transcriptional repression may provide a highly efficient mechanism for circadian control of gene expression. We also show that CLOCK/BMAL1 can interfere with promoter regulation by other, non‐circadian, transcription factors including N‐MYC and ETS, leading to attenuation or abrogation of transcription of CLOCK/BMAL1‐controlled stress‐induced genes. We propose that, based upon these results, both circadian repression and activation of the transcription of different target genes are required for circadian responses to various external stimuli, including genotoxic stress induced by anticancer treatment.