Organisms use their senses to transform external stimuli into an internal representation of the world. Insects employ their keen sense of smell for a variety of tasks including location of food sources, which can vary from yeast growing on ripe fruits for the vinegar fly Drosophila melanogaster to mammals for blood-feeding insects such as the mosquito Anopheles gambiae. The first informational relay between the external environment and the organism is the olfactory sensory neuron (OSN), whose activation translates the intensity, quality, and temporal features of volatile chemicals into spike trains. This dissertation focuses on understanding how the insect olfactory system functions at the periphery, shedding light on the molecular players involved and the interactions between environmental chemicals and OSNs. In Drosophila, most of the ~1,200 OSNs express members of the olfactory receptor (OR) protein family (Stocker, 1994; Vosshall et al., 1999). The functional OR complex comprises at least one variable odorant-binding subunit and one constant subunit named OR83b (Benton et al., 2006). Insect ORs have historically been grouped with mammalian and nematode ORs, both of which are G protein coupled receptors (GPCRs), whose activation leads to increased concentrations of intracellular second messengers and opening of cyclic nucleotide-gated channels (CNG; Buck and Axel, 1991; Colbert et al., 1997; Firestein et al., 1991; Nakamura and Gold, 1987; Troemel et ii al., 1995). Insect ORs lack similarity to GPCRs (Benton et al., 2006; Vosshall et al., 1999), and we hypothesized that they function as odorant-gated ion channels. We showed that expression of insect ORs in heterologous cells generates odorant-evoked currents that are resistant to G protein inhibitors, independent of cyclic nucleotides, and whose properties change based on OR subunit composition (Sato et al., 2008). This surprising discovery supports our hypothesis that insect ORs are indeed odorant-gated ion channels. Concurrently with these findings, we investigated the mode of action of DEET, the most widely used topical insect repellent, and showed that ORs are among its molecular targets. We demonstrated that DEET suppresses Drosophila food-seeking behavior, modulates OSN activity, and decreases OR-mediated currents in heterologous cells (Ditzen et al., 2008). Moreover, we showed that a missense polymorphism in a ligand-binding OR subunit leads to pharmacological resistance to the repellent in vivo. This is the first finding that identifies a molecular target of DEET. Within the OR complex, OR83b plays an essential role. Ligand-binding subunits fail to localize properly at the OSN dendrite in the absence of OR83b, resulting in almost complete loss of sense of smell (Benton et al., 2006; Larsson et al., 2004). We identified a putative localization motif in the OR83b protein, and showed that mutations in conserved residues abolish proper OR trafficking and impair odorant-evoked responses. This discovery defines critical amino acids that might be used as possible targets of future repellents to modulate the activity of insect OSNs. The discoveries described in this thesis will have an impact on the design of better and safer insect repellents and the control of insect-borne diseases