An infrared transceiver circuit for a toy gun or other novelty item includes an IR detector, a high Q band pass filter and a demodulator in the receiver section to control the operation of a counter which, in turn, actuates lights and sounds when a "hit" is detected. The transmitter portion generates an IR signal modulated by an oscillator and square wave generator. The high Q band pass circuit substantially eliminates unmodulated infrared as, for example, from sunlight, to increase receiver sensitivity.