Odors elicit a well-organized pattern of activation in glomeruli across the surface of the olfactory bulb. However, the mechanisms by which this map is transformed into an odor code by the bulb circuitry remain unclear. Recent physiological studies in bulb slices have identified several synaptic processes that could be involved in sharpening odorant signals. Mitral cells within a single odorant receptor-specific network can be synchronized by dendrodendritic excitatory interactions in a glomerulus, whereas mitral cells in different networks engage in long-lasting lateral inhibition mediated by dendrodendritic synapses with interneurons. The emerging picture is one in which groups of mitral cells use a unique set of mechanisms to accomplish computational functions similar to those performed by analogous modular structures in other sensory systems.