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Objective: Although olfactory deficits are common in schizophrenia, their underlying pathophysiology remains unknown. Recent evidence has suggested that cAMP signaling may be disrupted in schizophrenia. Since cAMP mediates signal transduction in olfactory receptor neurons, this could contribute to the etiology of observed olfactory deficits. This study was designed to test this hypothesis by determining odor detection threshold sensitivities to two odorants that differ in their relative activations of this intracellular cAMP signaling cascade. Method: Thirty schizophrenia patients, 25 healthy comparison subjects, and 19 unaffected first-degree relatives of schizophrenia patients were studied. Odor detection threshold sensitivities were measured for the two odorants citralva and lyral. Although both have fruity/floral scents, citralva strongly activates adenylyl cyclase to increase cAMP levels, while lyral is a very weak activator of adenylyl cyclase. Results: There was a significant group-by-odor interaction. Both schizophrenia patients and unaffected first-degree relatives were impaired in their ability to detect lyral versus citralva. Comparison subjects were equally sensitive to both odorants. This selective deficit could not be explained by differences in age, sex, smoking, clinical symptom profile, or medication use. Conclusions: This study establishes the presence of an odor-specific hyposmia that may denote a disruption of cAMP-mediated signal transduction in schizophrenia. The presence of a parallel deficit in the patients’ unaffected first-degree relatives suggests that this deficit is genetically mediated. Although additional physiological studies are needed to confirm the underlying mechanism, these results offer strong inferential support for the hypothesis that cAMP signaling is dysregulated in schizophrenia.