Olfactory bulb (OB) interneurons are derived primarily postnatally from progenitors in the anterior subventricular zone (SVZa) and migrate to the OB in the rostral migratory stream (RMS). Progenitors differentiate into phenotypically diverse granule and periglomerular cells by as yet undefined mechanisms. To visualize spatiotemporal aspects of periglomerular dopamine (DA) neuron differentiation, two independently derived transgenic mouse lines were analyzed with a 9-kb tyrosine hydroxylase (TH) promoter to drive either a LacZ or an enhanced green fluorescent protein (EGFP) reporter gene. Both reporters showed similar neonatal expression that varied from low levels in RMS, to moderate in the superficial granule cell layer, to strong in relatively large cells, possibly external tufted cells, in the periglomerular region. TH mRNA and protein were not detected in the RMS but were colocalized with the transgenes in neonatal superficial granule and periglomerular cells. By comparison, TH protein in adults was further limited to periglomerular cells. To demonstrate that transcriptional regulation was the same for EGFP and TH, expression was shown to decline similarly in the OB ipsilateral to odor deprivation produced by adult unilateral naris closure. Of two genes previously hypothesized to regulate OB DA expression, only regulated expression of the orphan receptor Nurr1, but not the homeobox-containing genes Dlx-1 and -2, was consistent with a role in regulation of the DA phenotype. These data demonstrate for the first time that DA phenotypic differentiation in neonates begins with low-level transcription in migrating progenitors in the RMS and culminates with activity-dependent protein expression in periglomerular cells innervated by olfactory receptor cells.