Circadian rhythms in physiological, endocrine and metabolic functioning are controlled by a neural clock located in the suprachiasmatic nucleus (SCN). This structure is endogenously rhythmic and the phase of this rhythm can be reset by light information from the eye. A key feature of the SCN is that while it is a small structure containing on the order of about 20,000 cells, it is amazingly heterogeneous. It is likely that anatomical heterogeneity reflects an underlying functional heterogeneity. In this review, we examine the physiological responses of cells in the SCN to light stimuli that reset the phase of the circadian clock, highlighting where possible the spatial pattern of such responses. Increases in intracellular calcium are an important signal in response to light, and this increase triggers many biochemical cascades that mediate responses to light. Furthermore, only some cells in the SCN are actually endogenously rhythmic, and these cells likely do not receive strong direct input from the retina. Therefore, this review also considers how light information is conveyed from the retinorecipient cells to the endogenously rhythmic cells that track circadian phase. A number of neuropeptides, including vasoactive intestinal polypeptide, gastrin-releasing peptide and substance P, may be particularly important in relaying such signals, but other neurochemicals such as GABA and nitric oxide may participate as well. A thorough understanding of the intracellular and intercellular responses to light, as well as the spatial arrangements of such responses may help identify important pharmacological targets for therapeutic interventions to treat sleep and circadian disorders.