Olfactory receptor neurons depolarize in response to odorant stimulation of their sensory cilia. One transduction mechanism involves a G-protein-mediated increase in adenylate cyclase activity, raising the internal cyclic AMP concentration to open a cyclic nucleotide-activated cation channel on the plasma membrane. An influx of Ca2+ through this channel, which is permeable to both monovalent and divalent cations, triggers olfactory adaptation. Previous work has indicated that at least part of this Ca(2+)-mediated adaptation resides in the channel itself, but the mechanism remains unclear and controversial. Here we use the cloned channel from rat expressed in a cell line and the native channel from rat olfactory receptor cells to show that Ca2+ reduces the apparent affinity of the channel for cAMP by up to 20-fold in the presence of calmodulin, an abundant protein in olfactory cilia. This decrease in apparent affinity appears to involve a direct interaction between Ca(2+)-calmodulin and the channel, and it can reduce the activation of the channel by cAMP by up to a few hundred-fold, suggesting that it may be a key component of the Ca(2+)-triggered olfactory adaptation.