Post-translational control is a crucial mechanism for circadian timekeeping. Evolutionarily conserved kinases and phosphatases have been implicated in circadian phosphorylation and the degradation of clock-relevant proteins, which sustain high-amplitude rhythms with 24-hr periodicity in animal behaviors and physiology. Here, we report a novel clock function of the heterodimeric Ca2+/calmodulin-dependent phosphatase calcineurin and its regulator sarah (sra) in Drosophila. Genomic deletion of the sra locus dampened circadian locomotor activity rhythms in free-running constant dark after entrainment in light-dark cycles. Poor rhythms in sra mutant behaviors were accompanied by lower expression of two oscillating clock proteins, PERIOD (PER) and TIMELESS (TIM), at the post-transcriptional level. RNA interference-mediated sra depletion in circadian pacemaker neurons was sufficient to phenocopy loss-of-function mutation in sra. On the other hand, a constitutively active form of the catalytic calcineurin subunit, Pp2B-14D(ACT), shortened circadian periodicity in locomotor behaviors and phase-advanced PER and TIM rhythms when overexpressed in clock neurons. Heterozygous sra deletion induced behavioral arrhythmicity in Pp2B-14D(ACT) flies, whereas sra overexpression rescued short periods in these animals. Finally, pharmacological inhibition of calcineurin in either wild-type flies or clock-less S2 cells decreased the levels of PER and TIM, likely by facilitating their proteasomal degradation. Taken together, these data suggest that sra negatively regulates calcineurin by cell-autonomously titrating calcineurin-dependent stabilization of PER and TIM proteins, thereby sustaining high-amplitude behavioral rhythms in Drosophila.