Stomatin-like protein-3 (STOML3) is an integral membrane protein expressed in the cilia of olfactory sensory neurons (OSNs), but its functional role in this cell type has never been addressed. STOML3 is also expressed in dorsal root ganglia neurons, where it has been shown to be required for normal touch sensation. Here, we extended previous results indicating that STOML3 is mainly expressed in the knob and proximal cilia of OSNs. We additionally showed that mice lacking STOML3 have a morphologically normal olfactory epithelium. Because of its presence in the cilia, together with known olfactory transduction components, we hypothesized that STOML3 could be involved in modulating odorant responses in OSNs. To investigate the functional role of STOML3, we performed loose patch recordings from wild-type (WT) and Stoml3 knock-out (KO) OSNs. We found that spontaneous mean firing activity was lower with additional shift in interspike intervals (ISIs) distributions in Stoml3 KOs compared with WT neurons. Moreover, the firing activity in response to stimuli was reduced both in spike number and duration in neurons lacking STOML3 compared with WT neurons. Control experiments suggested that the primary deficit in neurons lacking STOML3 was at the level of transduction and not at the level of action potential generation. We conclude that STOML3 has a physiological role in olfaction, being required for normal sensory encoding by OSNs.