The sensitivity of the Limulus lateral eye exhibits a pronounced circadian rhythm. At night a circadian oscillator in the brain activates efferent fibers in the optic nerve, inducing multiple changes in the physiological and anatomical characteristics of retinal cells. These changes increase the sensitivity of the retina by about five orders of magnitude. We investigated whether this increase in retinal sensitivity is accompanied by changes in the ability of the retina to process temporal information. We measured the frequency transfer characteristic (FTC) of single receptors (ommatidia) by recording the response of their optic nerve fibers to sinusoidally modulated light. We first measured the FTC in the less sensitive daytime state and then after converting the retina to the more sensitive nighttime state by electrical stimulation of the efferent fibers. The activation of these fibers shifted the peak of the FTC to lower frequencies and reduced the slope of the low-frequency limb. These changes reduce the eye's ability to detect rapid changes in light intensity but enhance its ability to detect dim flashes of light. Apparently Limulus sacrifices temporal resolution for increased visual sensitivity at night.