Humans have been aware of these cycles since pre-history, as an understanding of these ryhthms was essential to early hunters. The formal study of this daily rhythm and other biological rhythms (such as seasonal ones) is called Chronobiology.
Circadian rhythms are important in determining the sleeping and feeding patterns of all animals, including humans. There are clear patterns of brain wave activity, hormone production, cell regeneration and other biological activities linked to this 24 hour cycle.
The Circadian rhythm is neither fully dependent nor fully independent of external cues such as sunlight and temperature. Early researchers identified that some sort of "internal" rhythm must exist, because plants and animals did not react immediately to artificially-induced changes in daily rhythms. However it has been well established that a mechanism for adjustment also exists, as plants and animals will eventually adjust their internal clock to a new pattern (if it is sufficiently regular).
It has also been clearly established that the Circadian rhythm is rigidly linked to the light/dark cycle. Animals kept in total darkness for extended periods eventually demonstrate a "free running" rhythm with no predictable pattern. This research has influenced the design of spacecraft environments, as systems that mimic the light/dark cycle have been found to be highly beneficial to astronauts.
The Circadian "clock" in mammals is primarily located in the suprachiasmatic nucleus (SCN), a distinct group of cells located in the hypothalamus. Destruction of the SCN results in the complete absence of a Circadian rhythm. Contributing to this clock are light receptors found in the retina which have a pathway, (called the retinohypothalamic tract), leading to the SCN.
It appears that the SCN takes the information on day length from the retina, interprets it, and passes it on to the pineal gland (a pea-like structure found behind the hypothalamus), which then secretes the hormone melatonin in response. Secretion of melatonin peaks at night and ebbs during the day. The SCN does not appear to be able to rapidly react to changes in the light/dark cues.
Disruption to Circadian rhythms usually has a negative effect in the short term. Many travellers have experienced the condition known as jet lag, with its associated symptoms of fatigue, disorientation and insomnia. A number of other sleep disorders are associated with irregular or pathological functioning of the circadian rhythms.
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