The transduction current in several different types of sensory neurons arises from the activity of cyclic nucleotide-gated (CNG) ion channels. The channels in these sensory neurons vary in structure and function, yet each one demonstrates calcium-dependent modulation of ligand sensitivity mediated by the interaction of the channel with a soluble modulator protein. In cone photoreceptors, the molecular identity of the modulator protein was previously unknown. We report the discovery and characterization of CNG-modulin, a novel 301 aa protein that interacts with the N terminus of the β subunit of the cGMP-gated channel and modulates the cGMP sensitivity of the channels in cone photoreceptors of striped bass (Morone saxatilis). Immunohistochemistry and single-cell PCR demonstrate that CNG-modulin is expressed in cone but not rod photoreceptors. Adding purified recombinant CNG-modulin to cone membrane patches containing the native CNG channels shifts the midpoint of cGMP dependence from 91 µM in the absence of Ca(2+) to 332 µM in the presence of 20 µM Ca(2+). At a fixed cGMP concentration, the midpoint of the Ca(2+) dependence is 857 nM Ca(2+). These restored physiological features are statistically indistinguishable from the effects of the endogenous modulator. CNG-modulin binds Ca(2+) with a concentration dependence that matches the calcium dependence of channel modulation. We conclude that CNG-modulin is the authentic Ca(2+)-dependent modulator of cone CNG channel ligand sensitivity. CNG-modulin is expressed in other tissues, such as brain, olfactory epithelium, and the inner ear, and may modulate the function of ion channels in those tissues as well.