In Drosophila, the circadian clock is comprised of transcriptional feedback loops that control rhythmic gene expression responsible for daily rhythms in physiology, metabolism, and behavior. The core feedback loop, which employs CLOCK-CYCLE (CLK-CYC) activators and PERIOD-TIMELESS (PER-TIM) repressors to drive rhythmic transcription peaking at dusk, is required for circadian timekeeping and overt behavioral rhythms. CLK-CYC also activates an interlocked feedback loop, which uses the PAR DOMAIN PROTEIN 1ε (PDP1ε) activator and the VRILLE (VRI) repressor to drive rhythmic transcription peaking at dawn. Although Pdp1ε mutants disrupt activity rhythms without eliminating clock function, whether vri is required for clock function and/or output is not known. Using a conditionally inactivatable transgene to rescue vri developmental lethality, we show that clock function persists after vri inactivation but that activity rhythms are abolished. The inactivation of vri disrupts multiple output pathways thought to be important for activity rhythms, including PDF accumulation and arborization rhythms in the small ventrolateral neuron (sLN_v) dorsal projection. These results demonstrate that vri acts as a key regulator of clock output and suggest that the primary function of the interlocked feedback loop in Drosophila is to drive rhythmic transcription required for overt rhythms.