Olfactory sensory neuron (OSN) axons coalesce to form the olfactory nerve (ON) and then grow from the olfactory epithelium to the olfactory bulb (OB), enter the olfactory nerve layer (ONL), reorganize extensively, and innervate specific glomeruli. Within the ON and ONL a population of glial cells, the olfactory ensheathing cells (OECs), surround OSN axon fascicles. To better understand the relationship between OECs and axon fascicles in the ONL of the adult mouse, we used confocal microscopy and antibodies to the low affinity nerve growth factor receptor p75 (p75), glial fibrillary acidic protein (GFAP), neuropeptide Y (NPY), and S-100 to identify glia. Antibodies to olfactory marker protein (OMP) and neuronal cell adhesion molecule (NCAM) were used to identify OSN axons. Electron microscopy characterized the ONL ultrastructure. We found that glial processes were not uniformly distributed in the ONL of the mouse. The p75+ OEC processes were restricted to the ON and the outer ONL sublamina, and oriented parallel to the plane of the OB layers. In the inner ONL NPY+ OEC-like processes were seen. GFAP+ processes were restricted to the inner ONL sublamina, the ONL/GL boundary, and the GL, where they delineated loosely aggregated axon fascicles that entered the glomeruli obliquely. S-100+ processes and somata were distributed throughout the ONL; the outer and inner ONL were equivalent in their S-100 staining. Ultrastructural studies showed that, although OECs could be identified in both the outer and inner ONL, in the latter, their relationship to bundles of OEC axons appeared less orderly than seen in the outer ONL. Our data demonstrate a differential organization of the ONL that could subserve distinct functions; axon extension may occur predominately in the outermost ONL, whereas glomerular targeting occurs in the inner sublamina of the ONL. J. Comp. Neurol. 446:68–80, 2002. © 2002 Wiley-Liss, Inc.