We investigated the functions of clock genes period (per) and timeless (tim) in establishing negative feedback on circadian transcription factors clock/cycle (Clk/cyc) in Drosophila. We show that PER protein persists for several hours after rapid degradation of TIM in the morning. We observed in cell culture that isolated PER inhibits CLK/CYC‐activated transcription in the absence of TIM and we further demonstrated for the first time in vivo that PER accumulation in a tim loss‐of‐function mutant background causes efficient inhibition of CLK/CYC‐dependent transcription. These results identify PER to be the main inhibitor for CLK/CYC and they suggest a delay mechanism during early morning, when PER protein, after degradation of TIM, forms an inhibitor buffer for CLK/CYC that attenuates the restart of the next cycle of CLK/CYC‐activated transcription. While TIM likely enhances the inhibition of CLK/CYC by PER in the dark, our results suggest a reduction of PER‐mediated inhibition by TIM in light.