In contrast to the single sensory surface present in teleost fishes, several spatially segregated subsystems with distinct molecular and functional characteristics define the mammalian olfactory system. However, the evolutionary steps of that transition remain unknown. Here we analyzed the olfactory system of an early diverging tetrapod, the amphibian Xenopus laevis, and report for the first time the existence of two odor-processing streams, sharply segregated in the main olfactory bulb and partially segregated in the olfactory epithelium of pre-metamorphic larvae. A lateral odor-processing stream is formed by microvillous receptor neurons and is characterized by amino acid responses and Gαo/Gαi as probable signal transducers, whereas a medial stream formed by ciliated receptor neurons is characterized by responses to alcohols, aldehydes, and ketones, and Gαolf/cAMP as probable signal transducers. To reveal candidates for the olfactory receptors underlying these two streams, the spatial distribution of 12 genes from four olfactory receptor gene families was determined. Several class II and some class I odorant receptors (ORs) mimic the spatial distribution observed for the medial stream, whereas a trace amine-associated receptor closely parallels the spatial pattern of the lateral odor-processing stream. Other olfactory receptors (some class I odorant receptors and vomeronasal type 1 receptors) and odor responses (to bile acids, amines) were not lateralized, the latter not even in the olfactory bulb, suggesting an incomplete segregation. Thus, the olfactory system of X. laevis exhibits an intermediate stage of segregation and as such appears well suited to investigate the molecular driving forces behind olfactory regionalization.