Expressions for the density response of neutral atmospheric layers to propagating waves are derived. The expressions include nonlinear effects and are used to compute the response of the mesospheric sodium layer to low-frequency internal gravity waves. The results are compared with lidar observations of the sodium layer and used to deduce gravity wave parameters. It is shown that because of the large sodium density gradients and the relatively high amplitudes of gravity waves at mesospheric heights the nonlinear components of the layer density response must be considered in interpreting sodium lidar data.