The nervous system copes with variability in the external and internal environment by using neuromodulators to adjust the efficacy of neural circuits. The role of serotonin (5HT) as a neuromodulator of olfactory information processing in the antennal lobe (AL) of Manduca sexta was examined using multichannel extracellular electrodes to record the responses of ensembles of AL neurons to olfactory stimuli. In one experiment, the effects of 5HT on the concentration-response functions for two essential plant oils across a range of stimulus intensities were examined. In a second experiment, the effect of 5HT on the ability of ensembles to discriminate odorants from different chemical classes was examined. Bath application of 5HT enhanced AL unit responses by increasing response duration and firing rate, which in turn increased the amount of spike time cross-correlation and cross-covariance between pairs of units. 5HT had the greatest effect on overall ensemble activation at higher odorant concentrations, resulting in an increase in the gain of the dose-response function of individual units. Additionally, response thresholds shifted to lower odorant concentrations for some units, suggesting that 5HT increased their sensitivity. Serotonin enhanced ensemble discrimination of different concentrations of individual odorants as well as discrimination of structurally dissimilar odors at the same concentration. Given the known circadian fluctuations of 5HT in the AL of this species, these findings support the hypothesis that 5HT periodically enhances sensitivity and responsiveness in the AL of Manduca to maximize efficiency when the requirement for olfactory acuity is the greatest.