Neuronal pattern separation is thought to enable the brain to disambiguate sensory stimuli with overlapping features, thereby extracting valuable information. In the olfactory system, it remains unknown whether pattern separation acts as a driving force for sensory discrimination and the learning thereof. We found that overlapping odor-evoked input patterns to the mouse olfactory bulb (OB) were dynamically reformatted in the network on the timescale of a single breath, giving rise to separated patterns of activity in an ensemble of output neurons, mitral/tufted (M/T) cells. Notably, the extent of pattern separation in M/T assemblies predicted behavioral discrimination performance during the learning phase. Furthermore, exciting or inhibiting GABAergic OB interneurons, using optogenetics or pharmacogenetics, altered pattern separation and thereby odor discrimination learning in a bidirectional way. In conclusion, we propose that the OB network can act as a pattern separator facilitating olfactory stimulus distinction, a process that is sculpted by synaptic inhibition.