The development of the olfactory organ in the rainbow fish, Nematocentris maccullochi, was studied using scanning and transmission electron microscopy; it was compared with the developmental process in other teleosts, especially in the closely related atherinids and cyprinodonts. The formation of the nares parallels that in atherinids, salmonids, cyprinids and heterosomats, but differs from that found in cyprinodonts. Another ontogenetic feature in which the olfactory organs of the rainbow fish and also of atherinids differ from those of cyprinodonts, is the occurrence of transitory kinociliary cells which disappear during the postlarval period. The divergent evolutionary pathways are discussed with reference to experimental investigations. During development, ciliated and microvillous receptor cell types occur. At the primary larval stage ciliated receptor neurons are exclusively present. At a later stage the microvillous type develops and becomes equal in frequency. Thus, the microvillous receptor represents a separate type of olfactory neuron and is not a progenitor of the ciliated receptor cell.