What's the appropriate preposition to use in this case?
A pothole in the street or a pothole on the street?
You could use "on" if you named the street (in AmEn), such as "There are lots of potholes on Main Street," because that is referring to the location of the street, as on a map.
As gengo says, this is AE usage. In BrE, I would use 'in' here too.