Post-translational regulation is crucial for timely activating or inactivating clock proteins in circadian time-keeping systems. The phosphorylation status of two Drosophila clock proteins, PERIOD (PER) and TIMLESS (TIM), changes with 24-hr periodicity. Consequently, mutations in kinases and phosphatase involved in these processes lead to abnormal circadian behaviors. Here we demonstrate a novel clock function of a heterodimeric Ca2+/Calmodulin-dependent phosphatase calcineurin (CN) and its regulator sarah (sra) to sustain robust circadian rhythms in Drosophila. Sra knock-out (sraKO) flies did not anticipate morning in light-dark cycles and they displayed poor locomotor rhythms in constant dark (DD). RNA interference (RNAi)-mediated SRA depletion in circadian pacemaker neurons was sufficient to phenocopy circadian defects in sraKO flies. Gene expression analyses revealed that amplitude of daily cycling PER and TIM expression was compromised in sra mutants at protein but not mRNA levels. In contrast, individual knockout of three catalytic CN subunits modestly affected locomotor rhythms, possibly due to their functional redundancy. We found however that pacemaker neuron-specific overexpression of constitutively active CN subunit PP2B-14D shortened circadian periods in DD rhythms whereas SRA overexpression led to long-period locomotor behaviors. Consistently, pharmacological inhibition of CN in wild-type flies weakened morning activity peaks and phase-delayed evening activity onsets gradually in constant dark. More importantly, CN inhibition could rescue poor behavioral rhythms in sraKO flies. Taken together, our data suggest that SRA negatively titrates CN activity to maintain 24-hr rhythms of high-amplitude in Drosophila clocks.