The Drosophila larva possesses just 21 unique and identifiable pairs of olfactory sensory neurons (OSNs), enabling investigation of the contribution of individual OSN classes to the peripheral olfactory code. We combined electrophysiological and computational modeling to explore the nature of the peripheral olfactory code in situ. We recorded firing responses of 19/21 OSNs to a panel of 19 odors. This was achieved by creating larvae expressing just one functioning class of odorant receptor, and hence OSN. Odor response profiles of each OSN class were highly specific and unique. However many OSN-odor pairs yielded variable responses, some of which were statistically indistinguishable from background activity. We used these electrophysiological data, incorporating both responses and spontaneous firing activity, to develop a bayesian decoding model of olfactory processing. The model was able to accurately predict odor identity from raw OSN responses; prediction accuracy ranged from 12%-77% (mean for all odors 45.2%) but was always significantly above chance (5.6%). However, there was no correlation between prediction accuracy for a given odor and the strength of responses of wild-type larvae to the same odor in a behavioral assay. We also used the model to predict the ability of the code to discriminate between pairs of odors. Some of these predictions were supported in a behavioral discrimination (masking) assay but others were not. We conclude that our model of the peripheral code represents basic features of odor detection and discrimination, yielding insights into the information available to higher processing structures in the brain.