Although many properties of the nervous system are shared among animals and systems, it is not known whether different neuronal circuits use common strategies to guide behaviour. Here we characterize information processing by Caenorhabditis elegans olfactory neurons (AWC) and interneurons (AIB and AIY) that control food- and odour-evoked behaviours. Using calcium imaging and mutations that affect specific neuronal connections, we show that AWC neurons are activated by odour removal and activate the AIB interneurons through AMPA-type glutamate receptors. The level of calcium in AIB interneurons is elevated for several minutes after odour removal, a neuronal correlate to the prolonged behavioural response to odour withdrawal. The AWC neuron inhibits AIY interneurons through glutamate-gated chloride channels; odour presentation relieves this inhibition and results in activation of AIY interneurons. The opposite regulation of AIY and AIB interneurons generates a coordinated behavioural response. Information processing by this circuit resembles information flow from vertebrate photoreceptors to 'OFF' bipolar and 'ON' bipolar neurons, indicating a conserved or convergent strategy for sensory information processing.