The period homolog genes Per1, Per2 and Per3 are important components of the circadian clock system. In addition to their role in maintaining circadian rhythm, these genes have been linked to mood disorders, stress response and vulnerability to addiction and alcoholism. In this study, we combined high-resolution sequence analysis and quantitative trait locus (QTL) mapping of gene expression and behavioral traits to identify Per3 as a compelling candidate for the interaction between circadian rhythm, alcohol and stress response. In the BXD family of mouse strains, sequence variants in Per3 have marked effects on steady-state mRNA and protein levels. As a result, the transcript maps as a cis-acting expression QTL (eQTL). We found that an insertion/deletion (indel) variant in a putative stress response element in the promoter region of Per3 causes local control of transcript abundance. This indel results in differences in protein binding affinities between the two alleles through the Nrf2 transcriptional activator. Variation in Per3 is also associated with downstream differences in the expression of genes involved in circadian rhythm, alcohol, stress response and schizophrenia. We found that the Per3 locus is linked to stress/anxiety traits, and that the basal expression of Per3 is also correlated with several anxiety and addiction-related phenotypes. Treatment with alcohol results in increased expression of Per3 in the hippocampus, and this effect interacts with acute restraint stress. Our data provide strong evidence that variation in the Per3 transcript is causally associated with and also responsive to stress and alcohol.