In the adult olfactory bulb (OB) of vertebrates, local GABAergic interneurons (INs) mediate recurrent and lateral inhibition between the principal neurons of the OB, the mitral cells (MCs), and play pivotal roles in the processing of odor-evoked activity patterns. The properties and functions of INs in the developing OB are, however, not well understood. We studied the functional development of INs in the OB of living zebrafish larvae 3-6 days postfertilization using anatomical techniques and in-vivo two-photon Ca2+ imaging. We identified MCs and INs by cell-type-specific expression of transgenic fluorescent markers and found that the IN:MC ratio was lower than in the adult fish. Moreover, the fraction of INs responding with Ca2+ signals to a set of natural odors was substantially lower than in adults. Odors of different chemical classes evoked overlapping patterns of Ca2+ signals that were concentrated in the center of the IN layer. The GABA(A) receptor agonists GABA and muscimol strongly suppressed odor responses, whereas a GABA(A) receptor antagonist enhanced responses and altered the spatial distribution of odor-evoked activity. These results indicate that IN odor responses at early developmental stages are sparse and exhibit no obvious chemotopic organization. Nevertheless, GABAergic signaling is already inhibitory at early stages of OB development and strongly influences odor-evoked activity patterns. Hence, INs already participate in the processing of odor information at very early stages of OB development even though the majority of INs emerge only at later stages.