In the mammalian main olfactory bulb (MOB), the release of glutamate from lateral dendrites of mitral cells onto the dendrites of granule cells evokes recurrent and lateral inhibition of mitral cell activity. Whole-cell voltage recordings in the mouse MOB in vivo and in vitro show that recurrent and lateral inhibition together control the number, duration, and onset of odor-evoked action potential (AP) firing in mitral cells. APs in mitral cells propagate into the lateral dendrites and evoke a transient increase in dendritic calcium concentration ([Ca2+]), which is decremental with distance from the soma, and increases with AP number. These results suggest that the extent of AP propagation in lateral dendrites of mitral cells, along with the concomitant dendritic Ca(2+) transient, controls the amplitude of lateral and recurrent inhibition and thus is a critical determinant of odor-specific AP patterns in the MOB.