Octopamine biosynthesis requires tyrosine decarboxylase to convert tyrosine into tyramine and tyramine beta-hydroxylase to convert tyramine into octopamine. We identified and characterized a Caenorhabditis elegans tyrosine decarboxylase gene, tdc-1, and a tyramine beta-hydroxylase gene, tbh-1. The TBH-1 protein is expressed in a subset of TDC-1-expressing cells, indicating that C. elegans has tyraminergic cells that are distinct from its octopaminergic cells. tdc-1 mutants have behavioral defects not shared by tbh-1 mutants. We show that tyramine plays a specific role in the inhibition of egg laying, the modulation of reversal behavior, and the suppression of head oscillations in response to anterior touch. We propose a model for the neural circuit that coordinates locomotion and head oscillations in response to anterior touch. Our findings establish tyramine as a neurotransmitter in C. elegans, and we suggest that tyramine is a genuine neurotransmitter in other invertebrates and possibly in vertebrates as well.