The thermotactic behaviors of Caenorhabditis elegans indicate that its thermosensory system exhibits exquisite temperature sensitivity, long-term plasticity, and the ability to transform thermosensory input into different patterns of motor output. Here, we study the physiological role of the AFD thermosensory neurons by quantifying intracellular calcium dynamics in response to defined temperature stimuli. We demonstrate that short-term adaptation allows AFD to sense temperature changes as small as 0.05 degrees C over temperature ranges as wide as 10 degrees C. We show that a bidirectional thermosensory response (increasing temperature raises and decreasing temperature lowers the level of intracellular calcium in AFD) allows the AFD neurons to phase-lock their calcium dynamics to oscillatory thermosensory inputs. By analyzing the thermosensory response of AFD dendrites severed from their cell bodies by femtosecond laser ablation, we show that long-term plasticity is encoded as shifts in the operating range of a putative thermoreceptor(s) in the AFD sensory endings. Finally, we demonstrate that AFD activity is directly coupled to stimulation of its postsynaptic partner AIY. These observations indicate that many functions underlying thermotactic behavior are properties of one sensory neuronal type. Encoding multiple functions in individual sensory neurons may enable C. elegans to perform complex behaviors with simple neuronal circuits.