Odorant signal transduction occurs in the specialized cilia of the olfactory sensory neurons. Considerable biochemical evidence now indicates that this process could be mediated by a G protein-coupled cascade using cyclic AMP as an intracellular second messenger. A stimulatory G protein alpha subunit is expressed at high levels in olfactory neurons and is specifically enriched in the cilia, as is a novel form of adenylyl cyclase. This implies that the olfactory transduction cascade might involve unique molecular components. Electrophysiological studies have identified a cyclic nucleotide-activated ion channel in olfactory cilia. These observations provide evidence for a model in which odorants increase intracellular cAMP concentration, which in turn activates this channel and depolarizes the sensory neuron. An analogous cascade regulating a cGMP-gated channel mediates visual transduction in photoreceptor cells. The formal similarities between olfactory and visual transduction suggest that the two systems might use homologous channels. Here we report the molecular cloning, functional expression and characterization of a channel that is likely to mediate olfactory transduction.