The olfactory receptor (OR) superfamily provides a basis for the remarkable ability to recognize and discriminate a large number of odorants. In mice, the superfamily includes ϳ1000 members, and they recognize overlapping sets of odorants with distinct affinities and specificities. To address the molecular basis of odor discrimination by the mammalian OR superfamily, we performed functional analysis on a series of site-directed mutants and performed ligand docking simulation studies to define the odorant-binding site of a mouse OR. Our results indicate that several amino acids in the transmembrane domains formed a ligand-binding pocket. Although other G-proteincoupled receptors (GPCRs) recognize biogenic ligands mainly with ionic or hydrogen bonding interactions, ORs recognize odorants mostly via hydrophobic and van der Waals interactions. This accounts for the broad but selective binding by ORs as well as their relatively low ligand-binding affinities. Furthermore, we succeeded in rational receptor design, inserting point mutations in the odorant-binding site that resulted in predicted changes in ligand specificity and antagonist activity. This ability to rationally design the receptor validated the binding site structure that was deduced with our mutational and ligand docking studies. Such broad and specific sensitivity suggests an evolutionary process during which mutations in the active site led to an enormous number of ORs with a wide range of ligand specificity. The current study reveals the molecular environment of the odorant-binding site, and it further advances the understanding of GPCR pharmacology.