Seven neuropeptides are expressed within the Drosophila brain circadian network. Our previous mRNA profiling suggested that Allatostatin-C (AstC) is an eighth neuropeptide and specifically expressed in dorsal clock neurons (DN1s). Our results here show that AstC is, indeed, expressed in DN1s, where it oscillates. AstC is also expressed in two less well-characterized circadian neuronal clusters, the DN3s and lateral-posterior neurons (LPNs). Behavioral experiments indicate that clock-neuron-derived AstC is required to mediate evening locomotor activity under short (winter-like) and long (summer-like) photoperiods. The AstC-Receptor 2 (AstC-R2) is expressed in LNds, the clock neurons that drive evening locomotor activity, and AstC-R2 is required in these neurons to modulate the same short photoperiod evening phenotype. Ex vivo calcium imaging indicates that AstC directly inhibits a single LNd. The results suggest that a novel AstC/AstC-R2 signaling pathway, from dorsal circadian neurons to an LNd, regulates the evening phase in Drosophila.