Lateral inhibition in the olfactory bulb is mediated by circuits that involve reciprocal dendrodendritic connections between mitral and granule cells. Because of the properties of these connections and also because odor stimuli are not represented in an obviously topographic fashion, questions have been raised about whether the function of local inhibition in the olfactory bulb can be compared to the function of inhibition in other brain areas. Here, I propose an analysis of local inhibition in the olfactory bulb based on the simplification that olfactory bulb circuitry can be thought of as implementing a simple linear two-dimensional filter. This analysis highlights some important characteristics of the circuitry of the olfactory bulb and suggests that the function of lateral inhibition in the olfactory bulb may be to compensate for generalized, spatially distributed activation that otherwise may obscure the specific, discrete patterns of glomerular activation seen across the olfactory bulb.