A negative transcriptional feedback loop generates circadian rhythms in Drosophila. PERIOD (PER) is a critical state-variable in this mechanism, and its abundance is tightly regulated. We found that the Drosophila homolog of ATAXIN-2 (ATX2)--an RNA-binding protein implicated in human neurodegenerative diseases--was required for circadian locomotor behavior. ATX2 was necessary for PER accumulation in circadian pacemaker neurons and thus determined period length of circadian behavior. ATX2 was required for the function of TWENTY-FOUR (TYF), a crucial activator of PER translation. ATX2 formed a complex with TYF and promoted its interaction with polyadenylate-binding protein (PABP). Our work uncovers a role for ATX2 in circadian timing and reveals that this protein functions as an activator of PER translation in circadian neurons.