The olfactory system of the Florida spiny lobster, Panulirus argus, has olfactory receptors that are excited by the purine nucleotides AMP, ADP, and ATP. These receptors reside on chemosensory neurons that are contained within aesthetasc sensilla on the lateral filaments of the antennules. Also associated with the lobster's olfactory system are ectonucleotidase activities that dephosphorylate excitatory nucleotides, resulting in the production of the nonstimulatory nucleoside adenosine. Our studies of the 5'-ectonucleotidase, ecto-ADPase, and ecto-ATPase activities of this olfactory system showed that each activity was characterized by Michaelis-Menten kinetics; Michaelis constants ranged from 6.9 to 33.5 microM, and maximum velocities ranged from 2.5 to 28.8 fmol/sensillum/s. Evidence that AMP dephosphorylation may serve as an inactivation process was shown by the close correlation between the kinetics of 5'-ectonucleotidase activity and the periodicity of olfactory sampling. Decreased magnesium ion concentration or increased calcium ion concentration resulted in increased ecto-ATPase activity; this activity was insensitive to vanadate ion. Ectonucleotidase activities may have multiple effects on the detection of exogenous nucleotides by a chemosensory system. These effects can be either direct, such as the conversion of an odorant to an inactive compound, or indirect, such as the conversion of an odorant to another compound that can activate or inhibit either receptors or enzymes associated with the system.