Natural selection of variants within the Arabidopsis thaliana circadian clock can be attributed to adaptation to varying environments. To define a basis for such variation, we examined clock speed in a reporter-modified Bay-0 x Shakdara recombinant inbred line and localized heritable variation. Extensive variation led us to identify EARLY FLOWERING3 (ELF3) as a major quantitative trait locus (QTL). The causal nucleotide polymorphism caused a short-period phenotype under light and severely dampened rhythm generation in darkness, and entrainment alterations resulted. We found that ELF3-Sha protein failed to properly localize to the nucleus, and its ability to accumulate in darkness was compromised. Evidence was provided that the ELF3-Sha allele originated in Central Asia. Collectively, we showed that ELF3 protein plays a vital role in defining its light-repressor action in the circadian clock and that its functional abilities are largely dependent on its cellular localization.