Transformations between sensory representations are shaped by neural mechanisms at the cellular and the circuit level. In the insect olfactory system, the encoding of odor information undergoes a transition from a dense spatiotemporal population code in the antennal lobe to a sparse code in the mushroom body. However, the exact mechanisms shaping odor representations and their role in sensory processing are incompletely identified. Here, we investigate the transformation from dense to sparse odor representations in a spiking model of the insect olfactory system, focusing on two ubiquitous neural mechanisms: spike Significance Statement In trace conditioning experiments, insects, like vertebrates, are able to form an associative memory between an olfactory stimulus and a temporally separated reward. Forming this association requires a prolonged odor trace. However, spiking responses in the mushroom body, the principal site of olfactory learning, are brief and bound to the odor onset (temporal sparseness). We implemented a spiking network model that relies on spike frequency adaptation to reproduce temporally sparse responses. We found that odor identity is reliably encoded in neuron adaptation levels, which are mediated by spiketriggered calcium influx. Our results suggest that a prolonged odor trace is established in the calcium levels of the relevant neuronal population. This prediction has found recent experimental support in the fruit fly.