Olfactory transduction is thought to be initiated by the binding of odorants to specific receptor proteins in the cilia of olfactory receptor cells. The mechanism by which odorant binding could initiate membrane depolarization is unknown, but the recent discovery of an odorant-stimulated adenylate cyclase in purified olfactory cilia suggests that cyclic AMP may serve as an intracellular messenger for olfactory transduction. If so, then there might be a conductance in the ciliary plasma membrane which is controlled by cAMP. Here we report that excised patches of ciliary plasma membrane, obtained from dissociated receptor cells, contain a conductance which is gated directly by cAMP. This conductance resembles the cyclic GMP-gated conductance that mediates phototransduction in rod and cone outer segments, but differs in that it is activated by both cAMP and cGMP. Our data provide a mechanistic basis by which an odorant-stimulated increase in cyclic nucleotide concentration could lead to an increase in membrane conductance and therefore, to membrane depolarization. These data suggest a remarkable similarity between the mechanisms of olfactory and visual transduction and indicate considerable conservation of sensory transduction mechanisms.