Sensorimotor integration regulates goal-directed movements. We study the signaling mechanisms underlying sensorimotor integration in C. elegans during olfactory steering, when the sinusoidal movements of the worm generate an in-phase oscillation in the concentration of the sampled odorant. We show that cholinergic neurotransmission encodes the oscillatory sensory response and the motor state of head undulations by acting through an acetylcholine-gated channel and a muscarinic acetylcholine receptor, respectively. These signals converge on two axonal domains of an interneuron RIA, where the sensory-evoked signal suppresses the motor-encoding signal to transform the spatial information of the odorant into the asymmetry between the axonal activities. The asymmetric synaptic outputs of the RIA axonal domains generate a directional bias in the locomotory trajectory. Experience alters the sensorimotor integration to generate specific behavioral changes. Our study reveals how cholinergic neurotransmission, which can represent sensory and motor information in the mammalian brain, regulates sensorimotor integration during goal-directed locomotions.