Rodents can localize odor sources by comparing odor inputs to the right and left nostrils. However, the neuronal circuits underlying such odor localization are not known. We recorded neurons in the anterior olfactory nucleus (AON) while administering odors to the ipsilateral or contralateral (ipsi- or contra-) nostril. Neurons in the AON pars externa (AONpE) showed respiration phase-locked excitatory spike responses to ipsinostril-only stimulation with a category of odorants, and inhibitory responses to contranostril-only stimulation with the same odorants. Simultaneous odor stimulation of the ipsi- and contranostrils elicited significantly smaller responses than ipsinostril-only stimulation, indicating that AONpE neurons subtract the contranostril odor inputs from ipsinostril odor inputs. An ipsilateral odor source induced larger responses than a centrally located source, whereas an odor source at the contralateral position elicited inhibitory responses. These results indicate that individual AONpE neurons can distinguish the right or left position of an odor source by referencing signals from the two nostrils.