We have studied the development of olfactory nerves in the rat from their first contact with the telencephalic vesicle until the formation of glomerular structures in the olfactory bulb at early postnatal period. The study is based on serial semithin and ultrathin sections of material prepared for electron microscopy and antibodies to label radial glial cells, glial fibrillary acidic protein and Rat-401. Beginning on embryonic day 12, developing olfactory axons from the olfactory placode are accompanied by migratory cells, also derived from the olfactory placode, that reach the prospective olfactory bulb by embryonic day 13. The mass of migratory cells accumulate superficial to the telencephalic vesicle. The cells increase in number by mitotic divisions. The majority of these cells represent precursor elements that will later develop into the ensheathing cells of the olfactory nerves and olfactory nerve layer of the adult. Some migratory cells penetrate into the prospective olfactory bulb early during development. The first synaptic contacts of olfactory axons with dendritic processes in the olfactory bulb were observed at embryonic day 18. Glomerular formation is initiated by penetration of cells from the migratory mass into the prospective glomerular layer by embryonic day 20 to postnatal day 0. These cells form walls surrounding zones of high synaptic density forming protoglomeruli. Postnatally, the peripheral processes of radial glial cells branch profusely delimiting glomerular formations and transform into periglomerular astrocytes. Rat-401 stains radial glial cells from embryonic day 14. Immunoreactivity becomes restricted to the olfactory glomeruli during the first postnatal weeks and it virtually disappears by the end of the first postnatal month. We conclude that the early penetration of cells from the migratory mass into the prospective olfactory bulb, observed immediately after the first synaptic contacts were established, initiates the formation of olfactory glomeruli which becomes completed by the transformation of radial glial cells into periglomerular astrocytes.