In many regions of the visual system, the activity of a neuron is normalized by the activity of other neurons in the same region. Here we show that a similar normalization occurs during olfactory processing in the Drosophila antennal lobe. We exploit the orderly anatomy of this circuit to independently manipulate feedforward and lateral input to second-order projection neurons (PNs). Lateral inhibition increases the level of feedforward input needed to drive PNs to saturation, and this normalization scales with the total activity of the olfactory receptor neuron (ORN) population. Increasing total ORN activity also makes PN responses more transient. Strikingly, a model with just two variables (feedforward and total ORN activity) accurately predicts PN odor responses. Finally, we show that discrimination by a linear decoder is facilitated by two complementary transformations: the saturating transformation intrinsic to each processing channel boosts weak signals, while normalization helps equalize responses to different stimuli.
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