Olfactory sensing and its modulation are important for the insects in recognizing diverse odors from the environment and in making correct decisions to survive. Identifying new genes involved in olfactory modulation and unveiling their mechanisms may lead us to understand decision making processes in the central nervous system. Here, we report a novel olfactory function of the cyclic nucleotide‐gated (CNG) channel CG42260 in modulating ab3A olfactory sensory neurons, which specifically respond to food‐derived odors in fruit fly Drosophila melanogaster. We found that two independent CG42260 mutants show reduced responses in the ab3A neurons. Unlike mammalian CNGs, CG42260 is not expressed in the odorant sensory neurons but broadly in the central nervous system including neuropeptide‐producing cells. By using molecular genetic tools, we identified CG42260 expression in one pair of neuropeptide F (NPF) positive L1‐l cells known to modulate food odor responsiveness. Knockdown of CG42260 in the NPF neurons reduced production of NPF in Ll‐1 cells, which in turn, led to reduction of neuronal responses of the ab3A neurons. Our findings show the novel biological function of CG42260 in modulating olfactory responses to food odor through NPF.