The mammalian master molecular clock consisting of several clock gene products in the suprachiasmatic nucleus (SCN) drives circadian rhythms in behaviour and physiology. Molecular clocks consisting of the same components also exist in various peripheral organs. DEC1 and DEC2, basic helix-loop-helix transcription factors, were recently reported to be involved in the central clock in the SCN. We examined the expression profile of DEC1 and DEC2 in the periphery and their roles in the regulation of oscillating target genes in the liver. Levels of DEC1 and DEC2 mRNA exhibited a day-night variation in various peripheral tissues of rats. In the liver, their expression was high during the subjective night. Transfection assays showed that DEC2, but not DEC1, suppressed the transcription of the cholesterol 7alpha-hydroxylase gene (CYP7A), overwhelming the potent enhancement by D-site binding protein (DBP). Electrophoretic mobility shift assays indicated that DEC2 binds to the E-box (CACATG) at the -219/-214 region of CYP7A. The transcriptional activities of the other sterol metabolizing cytochrome P450s (Cyps), CYP8B and CYP51, were also suppressed by DEC2 but not DEC1. DEC2, but not DEC1, works as a direct output mediator that transmits the circadian signals to the hepatic functions, including the CYP7A, CYP8B, and CYP51 expression.