Glutamate decarboxylase (GAD), the enzyme that synthesizes the neurotransmitter gamma-aminobutyric acid (GABA), has been localized in the rat olfactory bulb by immunocytochemical methods with both light and electron microscopy. The light microscopic results demonstrated GAD-positive puncta concentrated in the external plexiform layer and in the glomeruli of the glomerular layer. In addition, GAD-positive reaction product stained the dentrites and somata of granule and periglomerular cells. The electron microscopic observations confirmed the presence of GAD-positive reaction product within granule and periglomerular somata and dendrites. In electron micrographs of the external plexiform layer, the gemmules which arise from the distal dentrites of granule cells were also observed to be filled with reaction product, and these structures corresponded in size and location to the puncta observed in light microscopic preparations. The gemmules were observed to form reciprocal dendrodentritic synaptic junctions with mitral cell dentrites which lacked reaction product. In the glomeruli, GAD-positive reaction product was observed in the dentritic shafts and gemmules of periglomerular cells which also formed reciprocal dendrodentritic synaptic contacts with mitral/tufted cell dentrites. The localization of GAD in known inhibitory neurons of the olfactory bulb supports the case that these local circuit neurons use GABA as their neurotransmitter. The present study demonstrates that GAD molecules located within certain neuronal somata and dentrites can be visualized with antisera prepared against GAD that was purified from synaptosomal fractions of mouse brains. This finding suggests that the lack of GAD staining within somata and dentrites of GABA-ergic neurons noted in previous studies of the cerebellum and spinal cord was probably due to low GAD concentrations, rather than to antigenic differences among GAD molecules located in different portions of the neuron. A striking differences among GAD molecules located in different portions of the neuron. A striking difference between the granule and periglomerular neurons of the olfactory bulb and the neurons of the cerebellum and spinal cord is that the former have presynaptic dentrites while the latter do not. Since GAD-positive reaction product can be detected in the somata and dentrites of GABA-ergic neurons which have presynaptic dentrites, it is suggested that these neurons may differ from other GABA-ergic neurons with respect to either transport or metabolism of GAD.