Extracellular Ca(2+) (Ca(2+)(o)) plays important roles in physiology. Changes of Ca(2+)(o) concentration ([Ca(2+)](o)) have been observed to modulate neuronal excitability in various physiological and pathophysiological settings, but the mechanisms by which neurons detect [Ca(2+)](o) are not fully understood. Calcium homeostasis modulator 1 (CALHM1) expression was shown to induce cation currents in cells and elevate cytoplasmic Ca(2+) concentration ([Ca(2+)](i)) in response to removal of Ca(2+)(o) and its subsequent addback. However, it is unknown whether CALHM1 is a pore-forming ion channel or modulates endogenous ion channels. Here we identify CALHM1 as the pore-forming subunit of a plasma membrane Ca(2+)-permeable ion channel with distinct ion permeability properties and unique coupled allosteric gating regulation by voltage and [Ca(2+)](o). Furthermore, we show that CALHM1 is expressed in mouse cortical neurons that respond to reducing [Ca(2+)](o) with enhanced conductance and action potential firing and strongly elevated [Ca(2+)](i) upon Ca(2+)(o) removal and its addback. In contrast, these responses are strongly muted in neurons from mice with CALHM1 genetically deleted. These results demonstrate that CALHM1 is an evolutionarily conserved ion channel family that detects membrane voltage and extracellular Ca(2+) levels and plays a role in cortical neuronal excitability and Ca(2+) homeostasis, particularly in response to lowering [Ca(2+)](o) and its restoration to normal levels.