Recent studies indicate that the precise timing and location of excitation and inhibition (E/I) within active dendritic trees can significantly impact neuronal function. How excitatory and inhibitory inputs are functionally organized at the subcellular level in intact circuits remains unclear. To address this issue, we took advantage of the retinal direction-selective ganglion cell circuit, in which directionally tuned inhibitory GABAergic input arising from starburst amacrine cells shape direction-selective dendritic responses. We combined two-photon Ca2+ imaging with genetic, pharmacological, and single-cell ablation methods to examine local E/I. We demonstrate that when active dendritic conductances are blocked, direction selectivity emerges semi-independently within unusually small dendritic segments (<10 µm). Impressively, the direction encoded by each segment is relatively homogenous throughout the ganglion cell’s dendritic tree. Together the results demonstrate a precise subcellular functional organization of excitatory and inhibitory input, which suggests that the parallel processing scheme proposed for direction encoding could be more fine-grained than previously envisioned.