The role of phosphoinositide signaling in olfactory transduction is still being resolved. Compelling functional evidence for the transduction of odor signals via phosphoinositide pathways in olfactory transduction comes from invertebrate olfactory systems, in particular lobster olfactory receptor neurons. We now provide molecular evidence for two components of the phosphoinositide signaling pathway in lobster olfactory receptor neurons, a G protein ␣ subunit of the G q family and an inositol 1,4,5-trisphosphate-gated channel or an inositol 1,4,5-trisphosphate (IP 3 ) receptor. Both proteins localize to the site of olfactory transduction, the outer dendrite of the olfactory receptor neurons. Furthermore, the IP 3 receptor localizes to membranes in the ciliary transduction compartment of these cells at both the light microscopic and electron microscopic levels. Given the absence of intracellular organelles in the sub-micron diameter olfactory cilia, this finding indicates that the IP 3 receptor is associated with the plasma membrane and provides the first definitive evidence for plasma membrane localization of an IP 3 R in neurons. The association of the IP 3 receptor with the plasma membrane may be a novel mechanism for regulating intracellular cations in restricted cellular compartments of neurons.Ca 2ϩ plays a central role in many physiological processes and regulates a plethora of ion channels, enzymes, and structural proteins. A pervasive mechanism for mobilizing Ca 2ϩ is the direct gating of a receptor ion channel (IP 3 R) 1 in the endoplasmic reticulum (ER) by the ubiquitous signaling molecule, inositol 1,4,5-trisphosphate (IP 3 ), thereby permitting release of the ion from ER stores (1, 2). IP 3 -induced calcium release has been implicated in such diverse cellular processes as oogenesis (3), T-cell receptor signaling (4), and long term depression (5). The enzyme phospholipase C liberates IP 3 , along with diacylglycerol, from the membrane phospholipid phosphoinositide 4,5-bisphosphate. The phosphoinositide (PI) signaling pathway can be regulated by both intrinsic receptors and by ligandactivated seven transmembrane-domain external receptors that in turn activate both the ␣ and ␥ subunits of heterotrimeric G proteins.The role of PI signaling is still being resolved in olfactory transduction (6 -11). Compelling functional evidence for PI signaling in olfactory transduction comes from invertebrate olfactory systems, in particular spiny lobster olfactory receptor neurons (ORNs). Several lines of evidence support the hypothesis that PI signaling mediates excitation in spiny lobster ORNs. Intracellular dialysis of IP 3 mimics the odor-induced inward current in cultured lobster ORNs (12). Odors elevate IP 3 in biochemical preparations of the outer dendrites of lobster ORNs, the site of olfactory transduction in these cells (13). IP 3 activates unitary currents in cell-free inside-out patches of outer dendritic membrane (14). Antisera against PI pathwayspecific G␣ q/11 proteins block the excitatory odor response ...