Mice with gene-targeted deletion of the Kv1.3 channel were generated to study its role in olfactory function. Potassium currents in olfactory bulb mitral cells from Kv1.3 null mice have slow inactivation kinetics, a modified voltage dependence, and a dampened C-type inactivation and fail to be modulated by activators of receptor tyrosine signaling cascades. Kv1.3 deletion increases expression of scaffolding proteins that normally regulate the channel through protein-protein interactions. Kv1.3^−/− mice have a 1,000- to 10,000-fold lower threshold for detection of odors and an increased ability to discriminate between odorants. In accordance with this heightened sense of smell, Kv1.3^−/− mice have glomeruli or olfactory coding units that are smaller and more numerous than those of wild-type mice. These data suggest that Kv1.3 plays a far more reaching role in signal transduction, development, and olfactory coding than that of the classically defined role of a potassium channel—to shape excitability by influencing membrane potential.