In the present study, the structural and functional role of smooth endoplasmic reticulum was investigated in bullfrog olfactory axon terminals. Structural evidence obtained from this study indicated that this vesiculotubular organelle becomes a more elaborate network of anastomosing tubules near the nerve terminal, located in the olfactory lobe of frog brain. Further structural evidence suggested that membranes of the smooth endoplasmic reticulum pinch off to give rise to some electron-lucent vesicles of approximately 50 nm diameter (microvesicles). Ultrastructural cytochemistry was employed in the present study to demonstrate that olfactory axon terminal smooth endoplasmic reticulum actively sequesters Ca2+. However, a variable amount of electron-dense product (calcium oxalate) was associated with microvesicles located at a distance from the synapse, in contrast to those clustered near the synapse which usually did not contain this reaction product. Results from Ca2+-Mg2+-adenosine-5'-triphosphatase (ATPase) cytochemistry showed a similar pattern of distribution, with smooth endoplasmic reticulum being densely labeled with ATPase reaction product (lead phosphate), but aggregated microvesicles in the nerve terminal generally lacking this electron-dense product. Therefore, it is concluded that olfactory axonal smooth endoplasmic reticulum plays a role in the regulation of intraneuronal Ca2+ levels, and that the Ca2+-sequestering activity of this membranous organelle is dependent upon enzymatic hydrolysis of ATP. Conversely, the microvesicles, particularly those accumulated near the synapse, lack this Ca2+-pumping capacity. Thus, if some of the microvesicles originate from smooth endoplasmic reticulum membranes which are capable of pumping Ca2+, but these vesicles themselves lack this capacity, one can postulate that the Ca2+ pumps are either removed from the newly formed microvesicle membranes or are somehow incapacitated in situ in the membrane.