Olfactory sensory neurons (OSNs) form synapses with local interneurons and second-order projection neurons to form stereotyped olfactory glomeruli. This primary olfactory circuit is hard-wired through the action of genetic cues. We asked whether individual glomeruli have the capacity for stimulus-evoked plasticity by focusing on the carbon dioxide (CO2) circuit in Drosophila. Specialized OSNs detect this gas and relay the information to a dedicated circuit in the brain. Prolonged exposure to CO2 induced a reversible volume increase in the CO2-specific glomerulus. OSNs showed neither altered morphology nor function after chronic exposure, but one class of inhibitory local interneurons showed significantly increased responses to CO2. Two-photon imaging of the axon terminals of a single PN innervating the CO2 glomerulus showed significantly decreased functional output following CO2 exposure. Behavioral responses to CO2 were also reduced after such exposure. We suggest that activity-dependent functional plasticity may be a general feature of the Drosophila olfactory system.