Arachnocampa species, commonly called glowworms, are flies whose larvae use light to attract prey. Here we compare rhythmicity in two of the nine described species: the Tasmanian species, Arachnocampa tasmaniensis, which inhabits caves and wet forest, and the eastern Australian mainland species, A. flava, primarily found in subtropical rainforest. Both species show the same nocturnal glowing pattern in external (epigean) environments and the same inhibition of bioluminescence by light and both species show circadian regulation of bioluminescence. We find that the underlying circadian bioluminescence propensity rhythm (BPR) of the two species peaks at opposite phases of the day:night cycle. Larvae of A. flava, placed in constant darkness in the laboratory, bioluminesce during the subjective scotophase, typical of nocturnal animals, whereas A. tasmaniensis shows the opposite tendency, bioluminescing most intensely during the subjective photophase. In A. tasmaniensis, which are exposed to natural day:night cycles, light exposure during the day overrides the high bioluminescence propensity through negative masking and leads to a release of bioluminescence after dusk when the BPR is on the wane. A consequence is that A. tasmaniensis is able to start glowing at any phase of the light:dark cycle as soon as masking by light is released, whereas A. flava is locked into nocturnal bioluminescence. We suggest that the paradoxical BPR of A. tasmaniensis is an adaptation for living in the cave environment. Observations of bioluminescence in colonies of A. tasmaniensis located in the transition from a cave mouth to the dark zone show that glowing is inhibited by light exposure but a peak bioluminescence follows immediately after "dusk" at their location. The substantial difference in the circadian regulation of bioluminescence between the two species probably reflects adaptation to the cave (hypogean) habitat in A. tasmaniensis and the forest (epigean) habitat in A. flava.