The timing of sleep is tightly governed by the circadian clock, which contains a negative transcriptional feedback loop and synchronizes the physiology and behavior of most animals to daily environmental oscillations. However, how the circadian clock determines the timing of sleep is largely unclear. In vertebrates and invertebrates, the status of sleep and wakefulness is modulated by the electrical activity of pacemaker neurons that are circadian regulated and suppressed by inhibitory GABAergic inputs. Here, we showed that Drosophila GABAA receptors undergo rhythmic degradation in arousal-promoting large ventral lateral neurons (lLNvs) and their expression level in lLNvs displays a daily oscillation. We also demonstrated that the E3 ligase Fbxl4 promotes GABAA receptor ubiquitination and degradation and revealed that the transcription of fbxl4 in lLNvs is CLOCK dependent. Finally, we demonstrated that Fbxl4 regulates the timing of sleep through rhythmically reducing GABA sensitivity to modulate the excitability of lLNvs. Our study uncovered a critical molecular linkage between the circadian clock and the electrical activity of pacemaker neurons and demonstrated that CLOCK-dependent Fbxl4 expression rhythmically downregulates GABAA receptor level to increase the activity of pacemaker neurons and promote wakefulness.