The subventricular zone produces neuroblasts that migrate to the olfactory bulb (OB) and differentiate into interneurons throughout postnatal life (Altman and Das, 1966; Hinds, 1968; Altman, 1969; Kishi et al., 1990; Luskin, 1993; Lois and Alvarez-Buylla, 1994). Although such postnatally generated interneurons have been characterized morphologically, their physiological differentiation has not been thoroughly described. Combining retroviral-mediated labeling of newly generated neurons with patch-clamp electrophysiology, we demonstrated that soon after new cells enter the layers of the olfactory bulb, they display voltage-dependent currents typical of more mature neurons. We also show that these "newcomers" express functional GABA and glutamate receptor channels, respond synaptically to stimulation of the olfactory nerve, and may establish both axodendritic and dendrodendritic synaptic contacts within the olfactory bulb. These data provide a basic description of the physiology of newly generated cells in the OB and show that such new cells are functional neurons that synaptically integrate into olfactory bulb circuitry soon after their arrival.