Action-potential propagation into the axon terminals of olfactory receptor cells was measured with the use of voltage-sensitive dye imaging in the isolated spiny lobster brain. Conditioning shocks to the olfactory nerve, known to cause long-lasting suppression of olfactory lobe neurons, allowed the selective imaging of activity in receptor cell axon terminals. In normal saline the optical signal from axon terminals evoked by a test stimulus was brief (40 ms) and small in amplitude. In the presence of low-Ca2+/high-Mg2+ saline designed to reduce synaptic transmission, the test response was unchanged in time course but increased significantly in amplitude (57 +/- 16%, means +/- SE). This increase suggests that propagation into receptor cell axon terminals is normally suppressed after a conditioning shock; this suppression is presumably synaptically mediated. Thus our results show that presynaptic inhibition occurs at the first synapse in the olfactory pathway and that the inhibition is mediated, at least in part, via suppression of action-potential propagation into the presynaptic terminal.