The GABAB agonist baclofen blocks transmission from the olfactory nerve to second order neurons in the frog olfactory bulb, and GABAB receptors in the rat olfactory bulb are selectively located in the glomerular layer. A reasonable hypothesis, therefore, is that inhibition in the glomerular layer is mediated, at least in part, by GABAB receptors. Here, we investigated the role of GABAB receptors in regulating the responses of mitral cells to activation of the olfactory nerve in the rat. Topical application of baclofen to the surface of the rat olfactory bulb reduced the amplitude of field potentials evoked by olfactory nerve stimulation (orthodromic response). Baclofen reduced the orthodromic response in a dose-dependent manner but the drug had no effect on the field potential evoked by antidromic activation of mitral cell axons (antidromic response). Baclofen also reduced olfactory nerve-evoked responses of mitral cells in an olfactory bulb slice preparation. The pharmacological specificity of the inhibition was confirmed by showing that the GABAB antagonist, CGP 55845A, blocked the inhibitory action of baclofen. These results suggest that transmission from olfactory nerve terminals to second order neurons is negatively regulated by periglomerular GABAergic interneurons; this inhibition is mediated, at least partially, by GABAB receptors.