Odor stimulation of olfactory receptor neurons (ORNs) leads to activation of a cyclic nucleotide-gated (CNG) channel present in the cilia of these cells. This channel contains three types of subunits, the principal CNGA2 subunit and two modulatory subunits (CNGA4 and CNGB1b). Here, we have analyzed the functional relevance of CNGB1 by gene-targeting in mice. Electro-olfactograms of CNGB1-deficient (CNGB1^-/-) mice displayed a reduced maximal amplitude and decelerated onset and recovery kinetics compared to wild type mice. In a behavioral test, CNGB1^-/-mice exhibited a profoundly decreased olfactory performance. Together these findings indicate that CNGB1 is required for normal olfaction. ORNs of CNGB1^-/-mice weakly expressed a CNGA2/CNGA4 channel, which displayed a decreased cAMP sensitivity, very rapid flicker-gating behavior and no fast modulation by Ca²⁺-calmodulin. Surprisingly, CNG channels lacking either CNGB1 or CNGA4 failed to be trafficked to olfactory cilia. In contrast, these channels were normally targeted to the plasma membrane of olfactory knobs. These results indicate that ORNs have developed an efficient control mechanism ensuring that only correctly assembled CNG channels are targeted to the cilia.