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In the olfactory bulb (OB), odorants induce oscillations in the γ range (20–80 Hz) that play an important role in the processing of sensory information. Synaptic transmission between dendrites is a major contributor to this processing. Glutamate released from mitral cell dendrites excites the dendrites of granule cells, which in turn mediate GABAergic inhibition back onto mitral cells. Although this reciprocal synapse is thought to be a key element supporting oscillatory activity, the mechanisms by which dendrodendritic inhibition induces and maintains γ oscillations remain unknown. Here, we assessed the role of the dendrodendritic inhibition, using mice lacking the GABA A receptor α1-subunit, which is specifically expressed in mitral cells but not in granule cells. The spontaneous inhibitory postsynaptic current frequency in these mutants was low and was consistent with the reduction of GABA A receptor clusters detected by immunohistochemistry. The remaining GABA A receptors in mitral cells contained the α3-subunit and supported slower decaying currents of unchanged amplitude. Overall, inhibitory-mediated interactions between mitral cells were smaller and slower in mutant than in WT mice, although the strength of sensory afferent inputs remained unchanged. Consequently, both experimental and theoretical approaches revealed slower γ oscillations in the OB network of mutant mice. We conclude, therefore, that fast oscillations in the OB circuit are strongly constrained by the precise location, subunit composition and kinetics of GABA A receptors expressed in mitral cells.