The primary olfactory brain center, the antennal lobe (AL) in insects or the olfactory bulb in vertebrates, is a notable example of a neural network for sensory processing. While physiological properties of the input, the olfactory receptor neurons, have become clearer, the operation of the network itself remains cryptic. Therefore we measured spatio-temporal odor-response patterns in the output neurons of the olfactory glomeruli using optical imaging in the honeybee Apis mellifera. We mapped these responses to identified glomeruli, which are the structural and functional units of the AL. Each odor evoked a complex spatio-temporal activity pattern of excited and inhibited glomeruli. These properties were odor- and glomerulus-specific and were conserved across individuals. We compared the spatial pattern of excited glomeruli to previously published signals, which derived mainly from the receptor neurons, and found that they appeared more confined, showing that inhibitory connections enhance the contrast between glomeruli in the AL. To investigate the underlying mechanisms, we applied GABA and the GABA-receptor antagonist picrotoxin (PTX). The results show the presence of two separate inhibitory networks: one is GABAergic and modulates overall AL activity, the other is PTX-insensitive and glomerulus-specific. Inhibitory connections of the latter network selectively inhibit glomeruli with overlapping response profiles, in a way akin to "lateral" inhibition in other sensory systems. Selectively inhibited glomeruli need not be spatial neighbors. The net result is a globally modulated, contrast-enhanced and predictable representation of odors in the olfactory output neurons.