Carbon dioxide is produced as a by-product of cellular respiration by all aerobic organisms and thus serves for many animals as an important indicator of food, mates, and predators. However, whether free-living terrestrial nematodes such as Caenorhabditis elegans respond to CO ₂ was unclear. We have demonstrated that adult C. elegans display an acute avoidance response upon exposure to CO ₂ that is characterized by the cessation of forward movement and the rapid initiation of backward movement. This response is mediated by a cGMP signaling pathway that includes the cGMP-gated heteromeric channel TAX-2/TAX-4. CO ₂ avoidance is modulated by multiple signaling molecules, including the neuropeptide Y receptor NPR-1 and the calcineurin subunits TAX-6 and CNB-1. Nutritional status also modulates CO ₂ responsiveness via the insulin and TGFβ signaling pathways. CO ₂ response is mediated by a neural circuit that includes the BAG neurons, a pair of sensory neurons of previously unknown function. TAX-2/TAX-4 function in the BAG neurons to mediate acute CO ₂ avoidance. Our results demonstrate that C. elegans senses and responds to CO ₂ using multiple signaling pathways and a neural network that includes the BAG neurons and that this response is modulated by the physiological state of the worm.