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Olfactory cyclic nucleotide–gated (CNG) ion channels are essential contributors to signal transduction of olfactory sensory neurons. The activity of the channels is controlled by the cyclic nucleotides guanosine 3′,5′-monophosphate (cGMP) and adenosine 3′,5′-monophosphate (cAMP). The olfactory CNG channels are composed of two CNGA2 subunits, one CNGA4 and one CNGB1b subunit, each containing a cyclic nucleotide–binding domain. Using patch-clamp fluorometry, we measured ligand binding and channel activation simultaneously and showed that cGMP activated olfactory CNG channels not only by binding to the two CNGA2 subunits but also by binding to the CNGA4 subunit. In a channel in which the CNGA2 subunits were compromised for ligand binding, cGMP binding to CNGA4 was sufficient to partly activate the channel. In contrast, in heterotetrameric channels, the CNGB1b subunit did not bind cGMP, but channels with this subunit showed activation by cAMP. Thus, the modulatory subunits participate actively in translating ligand binding to activation of heterotetrameric olfactory CNG channels and enable the channels to differentiate between cyclic nucleotides.