  Magnetic fields generated by human and animal organs, such as the heart,
brain and nervous system carry information useful for biological and medical
purposes. These magnetic fields are most commonly detected using
cryogenically-cooled superconducting magnetometers. Here we present the frst
detection of action potentials from an animal nerve using an optical atomic
magnetometer. Using an optimal design we are able to achieve the sensitivity
dominated by the quantum shot noise of light and quantum projection noise of
atomic spins. Such sensitivity allows us to measure the nerve impulse with a
miniature room-temperature sensor which is a critical advantage for biomedical
applications. Positioning the sensor at a distance of a few millimeters from
the nerve, corresponding to the distance between the skin and nerves in
biological studies, we detect the magnetic field generated by an action
potential of a frog sciatic nerve. From the magnetic field measurements we
determine the activity of the nerve and the temporal shape of the nerve
impulse. This work opens new ways towards implementing optical magnetometers as
practical devices for medical diagnostics.
