In the mammalian olfactory system, there exist several parallel specialized subsystems, one of which is the necklace olfactory system. This subsystem has several interesting features in its anatomical organization and physiological responses. Its olfactory sensory neurons (OSNs) in the olfactory epithelium project their axons to a set of glomeruli in the caudal olfactory bulb, forming the shape of "beads-on-a-string" and thus being named as "necklace glomeruli." Physiologically, necklace OSNs lack components suggesting cAMP as the second messenger in the signal transduction cascade as those observed in the OSNs of the canonical olfactory system. In contrast, necklace OSNs possess several signaling components suggesting cGMP as the second messenger. Our recent studies demonstrate that one of the major functions of the necklace olfactory system is to detect atmospheric carbon dioxide (CO2) and mediate avoidance behavior, suggesting novel molecular and cellular mechanisms of CO2 sensing. Here, I will review recent progresses on our understanding of the organization and function of the necklace olfactory subsystem. These recent studies suggest the exciting potentials of using the necklace olfactory system as an advantageous model system for studying neural circuits underlying innate avoidance behavior.