To address the hypothesis that retinoids produced by synthesizing enzymes present in the primary olfactory system influence the mouse olfactory sensory map, we expressed a dominant-negative retinoic acid receptor selectively in olfactory sensory neurons. We show that neurons deficient in nuclear retinoid signaling are responsive to odors and form correct odorant receptor-specific axonal projections to target neurons in the olfactory bulb of the brain. Subsequent to the formation of the map, the neurons die prematurely by retrograde-driven caspase-3 activation, which resembles the previously described mechanism of neural death after olfactory bulb ablation. This neurodegenerative event is initiated the second postnatal week and occurs in the adult animal without a compensatory increase of progenitor cell proliferation. In addition, we find that nuclear retinoid signaling is required for the expression of a retinoic acid-degrading enzyme, Cyp26B1, in a small fraction of mature neurons. Collectively, the results provide evidence for a role of locally regulated retinoid metabolism in neuroprotection and in determining population size of neurons at a late stage of neural circuit formation.