Excitatory neurotransmission in the rat olfactory cortex slice has been monitored by measuring the amplitude of the N-wave surface field potential evoked by stimulation of the lateral olfactory tract. Application of exogenous adenosine or aspartate depressed the N-wave amplitude and evoked synthesis of cyclic AMP. These effects were partially antagonized by theophylline and the reduction of amplitude of the N-wave was potentiated by dipyridamole. When the olfactory tract slice was stimulated, dipyridamole alone reduced the amplitude of the N-wave and increased levels of cyclic AMP, both effects being antagonized by theophylline. Exogenous adenosine significantly attenuated the K+-evoked release of [3H]D-aspartate by a mechanism insensitive to either theophylline or dipyridamole. It is concluded that synaptic activation of the olfactory cortex releases adenosine, possibly as the result of the actions of the transmitter candidate of the olfactory tract, aspartate, and that this causes sufficient adenosine to accumulate to depress excitatory transmission and elevate tissue levels of cyclic AMP although there is no positive evidence that these two effects are directly related.