The processing of olfactory inputs by the parahippocampal region has a central role in the organization of memory in mammals. The olfactory input is relayed to the hippocampus via interposed synapses located in the piriform and entorhinal cortices. Whether olfactory afferents directly or indirectly project to other areas of the parahippocampal region beside the entorhinal cortex (EC) is uncertain. We performed an electrophysiological and imaging study of the propagation pattern of the olfactory input carried by the fibres that form the lateral olfactory tract (LOT) into the parahippocampal region of the in vitro isolated guinea pig preparation. Laminar analysis was performed on field potential depth profiles recorded with 16-channel silicon probes at different sites of the insular–parahippocampal cortex. The LOT input induced a large amplitude polysynaptic response in the lateral EC. Following appropriate LOT stimulation, a late response generated by the interposed activation of the hippocampus was observed in the medial EC. LOT stimulation did not induce any local response in area 36 of the perirhinal cortex (PRC), while a small amplitude potential with a delay similar to the lateral EC response was inconsistently observed in PRC area 35. No PRC potentials were observed following the responses evoked by LOT stimulation in either the lateral or the medial EC. These findings were substantiated by current source density analysis of PRC laminar profiles. To further verify the absence of EC-to–PRC field interactions after LOT stimulation, high-resolution optical imaging of neuronal activity was performed after perfusion of the isolated brain with the voltage-sensitive dye RH-795. The optical recordings confirmed that olfactory-induced activity in the EC does not induce massive PRC activation. The present findings suggest that the olfactory input into the parahippocampal region is confined to the entorhinal cortex. The results also imply that, as demonstrated for the PRC-to-EC pathway, the propagation of neuronal activity from the EC to the PRC is hindered, possibly by a powerful inhibitory control generated within the EC.