THE sense of smell is highly evolved in mammals, allowing discrimination between a vast number of odorants, with detection thresholds as low as 10⁻¹⁷M (ref. 1). Although several features of mammalian olfactory transduction have been revealed by biochemical and molecular biological studies^2–11, the odorant-induced membrane current has remained elusive. In amphibians this current is mediated by cyclic-nucleotide-gated channels^12–15, which depolarize the cell by Na⁺ and Ca⁺influx^16,17 and consequent Cl^- efflux through Ca²⁺-dependent Cl^- channels^18,19. The Cl^- current may be absent in mammals, however, because its proposed role is linked to the aquatic habitat of amphibians¹⁸. Here we show that the transduction current in rat olfactory receptor cells is initiated by cyclic-nucleotide-gated channels. The Cl^- current is also present and endows the transduction current with a steep sigmoidal dependence on cyclic AMP concentration in both rat and in an amphibian, indicating a new function for the Cl^- channel: nonlinear amplification of the transduction signal, whereby suprathreshold responses are boosted relative to basal transduction noise.