Olfactory receptor neurons begin to differentiate from stem cells on day E10 of embryonic life in the rat. By day E16, the receptor epithelium is well populated. On this day single neuron action potentials could be recorded with some ease and the electro-olfactogram was well developed. The receptor neurons were functional in that they responded to the vapors of odorous substances. However, they were not selective. Each cell responded to nearly all of the substances in the stimulus set. The first synaptic connections between receptors and mitral cells are established on day E18. The olfactory marker protein is reported to appear first in the receptors on the same day. By day E21, single unit responses changed dramatically. The cells became selective, responding to about half of the substances in our set. The electro-olfactogram reached its limiting amplitude well before this time.