Olfactory nerve axons terminate in olfactory bulb glomeruli forming excitatory synapses onto the dendrites of mitral/tufted (M/T) and juxtaglomerular cells, including external tufted (ET) and periglomerular (PG) cells. PG cells are heterogeneous in neurochemical expression and synaptic organization. We used a line of mice expressing green fluorescent protein under the control of the glutamic acid decarboxylase 65-kDa gene (GAD65+) promoter to characterize a neurochemically identified subpopulation of PG cells by whole cell recording and subsequent morphological reconstruction. GAD65+ GABAergic PG cells form two functionally distinct populations: 33% are driven by monosynaptic olfactory nerve (ON) input (ON-driven PG cells), the remaining 67% receive their strongest drive from an ON-->ET-->PG circuit with no or weak monosynaptic ON input (ET-driven PG cells). In response to ON stimulation, ON-driven PG cells exhibit paired-pulse depression (PPD), which is partially reversed by GABA(B) receptor antagonists. The ON-->ET-->PG circuit exhibits phasic GABA(B)-R-independent PPD. ON input to both circuits is under tonic GABA(B)-R-dependent inhibition. We hypothesize that this tonic GABA(B)R-dependent presynaptic inhibition of olfactory nerve terminals is due to autonomous bursting of ET cells in the ON-->ET-->PG circuit, which drives tonic spontaneous GABA release from ET-driven PG cells. Both circuits likely produce tonic and phasic postsynaptic inhibition of other intraglomerular targets. Thus olfactory bulb glomeruli contain at least two functionally distinct GABAergic circuits that may play different roles in olfactory coding.