In nature, animals normally perceive sensory information on top of backgrounds. Thus, the neural substrate to perceive under background conditions is inherent in all sensory systems. Where and how sensory systems process backgrounds is not fully understood. In olfaction, only few studies addressed the issue of odor coding on top of continuous odorous backgrounds. Here, we tested how background odors are encoded by mitral cells (MCs) in the olfactory bulb (OB) of male mice. Using in vivo two-photon calcium imaging we studied how MCs responded to odors in isolation versus their responses to the same odors on top of continuous backgrounds. We show that MCs adapt to continuous odor presentation and that mixture responses are different when preceded by background. In a subset of odor combinations, this history dependent processing was useful to promote identification of target odors over background. Other odorous backgrounds were highly dominant, such that target odors were completely masked by their presence. Our data are consistent in both low and high odor concentrations and in anesthetized and awake mice. Thus, odor processing in the OB is strongly influenced by the recent history of activity, which could have strong impact on how odors are perceived.Significant statement: We examined a basic feature of sensory processing in the olfactory bulb. Specifically, we measured how mitral cells adapt to continuous background odors and how target odors are encoded on top of such background. Our results show clear differences in odor coding based on the immediate history of the stimulus. Our results support the argument that odor coding depends on the recent history of the sensory environment, already at the level of olfactory bulb output.