In this paper, we investigate the convergence, the boundedness and the periodic character of the positive solutions of the difference equation y(n+1) = alpha + beta e(-yn)/gamma + y(n-1), n = 0,1,2,..., where the parameters alpha, beta, gamma are positive numbers and the initial conditions y(-1), y(0) are arbitrary non-negative numbers. (c) 2006 Elsevier Inc. All rights reserved.