Sensory systems, both in the living and in machines, have to be optimized with respect to their environmental conditions. The pheromone subsystem of the olfactory system of moths is a particularly well-defined example in which rapid variations of odor content in turbulent plumes require fast, concentration-invariant neural representations. It is not clear how cellular and network mechanisms in the moth antennal lobe contribute to coding efficiency. Using computational modeling, we show that intrinsic potassium currents (IA and ISK) in projection neurons may combine with extrinsic inhibition from local interneurons to implement a dual latency code for both pheromone identity and intensity. The mean latency reflects stimulus intensity, whereas latency differences carry concentration-invariant information about stimulus identity. In accordance with physiological results, the projection neurons exhibit a multiphasic response of inhibition-excitation-inhibition. Together with synaptic inhibition, intrinsic currents IA and ISK account for the first and second inhibitory phases and contribute to a rapid encoding of pheromone information. The first inhibition plays the role of a reset to limit variability in the time to first spike. The second inhibition prevents responses of excessive duration to allow tracking of intermittent stimuli.