1. The effect of the putative neural messenger carbon monoxide (CO) and the role of the cGMP second-messenger system for olfactory signal generation was examined in isolated olfactory receptor neurons (ORNs) of the tiger salamander. 2. With the use of whole cell voltage-clamp recordings in combination with a series of ionic and pharmological tests, it is demonstrated that exogenously applied CO is a potent activator (K1/2 = 2.9 microM) of cyclic nucleotide-gated (CNG) channels previously described to mediate odor transduction. 3. Several lines of evidence suggest that CO mediates its effect through stimulation of a soluble guanylyl cyclase (sGC) leading to formation of the second-messenger cGMP. This conclusion is based on the findings that CO responses show an absolute requirement for guanosine 5'-triphosphate (GTP) in the internal solution, that no direct effect of CO on CNG currents in the absence of GTP is detectable, and that a blocker of sGC activation, LY85383 (10 microM), completely inhibits the CO response. 4. The dose-response curve for cGMP at CNG channels is used as a calibration to provide a quantitative estimate of the CO-stimulated cGMP formation. This analysis implies that CO is a potent activator of olfactory sGC. 5. Perforated patch recordings using amphotericin B demonstrate that low micromolar doses of CO effectively depolarize the membrane potential of ORNs through tonic activation of CNG channels. This effect in turn regulates excitable and adaptive properties of ORNs and modulates neuronal responsiveness. 6. These data argue for an important role of the cGMP pathway in olfactory signaling and support the idea that CO may function as a diffusible messenger in the olfactory system.