Olfactory sensory neurons detect a large variety of odor molecules and send information through their axons to the olfactory bulb, the first site for the processing of olfactory information in the brain. The axonal connection is precisely organized so that signals from 1000 different types of odorant receptors are sorted out in 1800 glomeruli in the mouse olfactory bulb. Individual glomerular modules presumably represent a single type of receptor and are thus tuned to specific molecular features of odorants. Local neuronal circuits in the bulb mediate lateral inhibition among glomerular modules to sharpen the tuning specificity of output neurons. They also mediate synchronized oscillatory discharges among specific combinations of output neurons and may contribute to the integration of signals from distinct odorant receptors in the olfactory cortex.