The development of the olfactory organ of the zebrafish, from the forming of early placode to the adult organ, was investigated by electron microscopy and DiI labeling. The olfactory placode is formed by a subepidermal layer of cells. These cells differ from those of the epidermis as well as from brain cells, and they do not mingle either with epidermal or with brain cells. No migration of cells from the brain or the epidermis towards the subepidermal cell layer has been observed. The cells of the subepidermal layer seem to form all cell types of the olfactory mucosa, i.e., basal cells, ciliated and microvillous receptor cells, supporting cells, and ciliated nonsensory cells. Axons grow into the forebrain at a very early stage when the epidermis still covers the placode completely. Dendrites grow out when the epidermis separates, building the olfactory pit. This process implicates neither cell lysis nor cell degeneration. The olfactory pit forms a rosette with a midline raphe and olfactory lamellae. The incurrent nostril is separated from the excurrent nostril by a funnel-shaped structure. Differentiation of the olfactory placode in the embryo is accomplished very quickly, whereas the development into the adult organ during larval stages is a slow process.