The distribution of a magnetic field in single-phase polycrystalline bulk MgB2 has been measured using a magneto-optical (MO) technique for an external magnetic field applied perpendicular to the sample surface. The MO studies indicate that an intergranular current network is readily established in this material and the current is not limited by weak-linked grain boundaries. The grain boundaries are observed to resist preferential magnetic-field penetration and the persistent current has an intergranular character at temperatures up to 30 K. The results provide clear evidence that the intragranular current flow is isotropic. A critical current density of approximate to 10(4) Acm(-2) was estimated at 30 K in a field of 150 mT from the magnetic-field gradient using the standard Bean model. These results provide further evidence of the considerable potential for MgB2 for engineering applications. (C) 2001 American Institute of Physics.