Lateral inhibition is a common feature of cortical networks, serving such functions as contrast enhancement. In the olfactory bulb, inhibition is imbedded in the local connectivity at dendrodendritic synapses between mitral cells and interneurons. However, there is also evidence for excitatory interactions between mitral cells despite the lack of direct synaptic connections. This lateral excitation, although a less well recognized feature of the circuit, provides a potentially powerful mechanism to enhance coordinated activity. We examined lateral excitation in paired recordings between mitral cells projecting to the same glomerulus. Trains of action potentials in one mitral cell evoked autoexcitation in the stimulated cell and a prolonged depolarization in the second cell. This lateral excitation was absent in connexin36−/−mice, which lack mitral–mitral cell gap junctions. However, spillover of dendritically released glutamate contributed to lateral excitation during concerted mitral cell excitation or by single-cell activity if glutamate uptake was blocked. Our results suggest that electrical coupling and spillover create a lateral excitatory network within the glomerulus, thus markedly amplifying the sensitivity of each glomerulus to incoming sensory input.