Insects sense odorants with specialized odorant receptors (ORs). Each antennal olfactory receptor neuron expresses one OR with an odorant binding site together with a conserved coreceptor called Orco which does not bind odorants. Orco is necessary for localization of ORs to dendritic membranes and, thus, is essential for odorant detection. It forms a spontaneously opening cation channel, activated via phosphorylation by protein kinase C. Thereafter, Orco is also activated via cyclic adenosine monophosphate (cAMP). Orco forms homo-as well as heteromers with ORs with unknown stoichiometry. Contradictory publications suggest different mechanisms of olfactory transduction. On the one hand, evidence accumulates for the employment of more than one G protein-coupled olfactory transduction cascade in different insects. On the other hand, results from other studies suggest that the OR-Orco complex functions as an odorant-gated cation channel mediating ionotropic signal transduction. This review analyzes conflicting hypotheses concerning the role of Orco in insect olfactory transduction. In conclusion, in situ studies in hawkmoths falsify the hypothesis that Orco underlies odorant-induced ionotropic signal transduction in all insect species. Instead, Orco forms a metabotropically gated, slow cation channel which controls odorant response threshold and kinetics of the sensory neuron.