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Circadian rhythms are determined by cell-autonomous transcription-translation feedback loops that entrain to environmental stimuli. In the model circadian clock of Drosophila melanogaster, the clock is set by the light-induced degradation of the core oscillator protein timeless (TIM) by the principal light-sensor cryptochrome (CRY). The cryo-EM structure of CRY bound to TIM revealed that within the extensive CRY:TIM interface, the TIM N-terminus binds into the CRY FAD pocket, in which FAD and the associated phosphate-binding loop (PBL) undergo substantial rearrangement. The TIM N-terminus involved in CRY binding varies in isoforms that facilitate the adaptation of flies to different light environments. Herein, we demonstrate, through peptide binding assays and pulsed-dipolar electron spin resonance (ESR) spectroscopy, that the TIM N-terminal peptide alone exhibits light-dependent binding to CRY and that the affinity of the interaction depends on the initiating methionine residue. Extensions to the TIM N-terminus that mimic less light-sensitive variants have substantially reduced interactions with CRY. Substitutions of CRY residues that couple to the flavin rearrangement in the CRY:TIM complex have dramatic effects on CRY light activation. CRY residues Arg237 on α8, Asn253, and Gln254 on the PBL are critical for the release of the CRY autoinhibitory C-terminal tail (CTT) and subsequent TIM binding. These key light-responsive elements of CRY are well conserved throughout Type I cryptochromes of invertebrates but not by cryptochromes of chordates and plants, which likely utilize a distinct light-activation mechanism.