Sensory perception requires accurate encoding of stimulus information by sensory receptor cells. We identified NCKX4, a potassium-dependent Na(+)/Ca(2+) exchanger, as being necessary for rapid response termination and proper adaptation of vertebrate olfactory sensory neurons (OSNs). Nckx4(-/-) (also known as Slc24a4) mouse OSNs displayed substantially prolonged responses and stronger adaptation. Single-cell electrophysiological analyses revealed that the majority of Na(+)-dependent Ca(2+) exchange in OSNs relevant to sensory transduction is a result of NCKX4 and that Nckx4(-/-) mouse OSNs are deficient in encoding action potentials on repeated stimulation. Olfactory-specific Nckx4(-/-) mice had lower body weights and a reduced ability to locate an odorous source. These results establish the role of NCKX4 in shaping olfactory responses and suggest that rapid response termination and proper adaptation of peripheral sensory receptor cells tune the sensory system for optimal perception.