As with other sensory modalities, olfactory information must be transduced by from peripheral receptors into a neural signal. This occurs in the olfactory epithelium within the nasal cavity. The information is then transmitted to more central structures in the brain, the olfactory bulb and primary olfactory cortex. The primary olfactory cortex is a paleocortical region located around the junction between the frontal and temporal lobes, and it is here that the sensory signal is integrated to allow detection and discrimination of specific stimuli. From this cortex sensory activity is transferred to other parts of the brain, including the medial thalamus, the orbital neocortex, the amygdala, and the hippocampus, through which it presumably reaches sensory consciousness and affects behavior, as well as to the hypothalamus, through which it affects visceral function. While these basic features resemble other sensory systems, the olfactory system differs from the other sensory systems in a variety of ways.

Olfaction is the only sensory modality that is directly connected into the cerebral hemisphere (in a sense, the telencephalon developed in relation to olfactory input). Possibly because of this phylogenetic relationship, olfactory sensory activity is transferred directly from the olfactory bulb to the olfactory cortex, without a thalamic relay. Although there is a subsequent projection from the olfactory cortex to the mediodorsal thalamic nucleus and from there to the posterior orbital cortex, this transthalamic pathway is less substantial (in terms of the number of neurons involved) than a direct, monosynaptic projection from the olfactory cortex to the same orbital cortical areas. The transthalamic projection is therefore not essential for relay of sensory information to the neocortex.

Another difference is that neural integration and analysis of olfactory stimuli may not involve a topographic or "point-to-point" organization beyond the olfactory bulb. Olfactory stimuli are not intrinsically ordered along spatial axes, like vision and somatic sensation, or along a frequency axis, like audition, and it is likely olfactory sensation is not based on a spatial organization. Although an organization based on specific odor receptors has been found in the projection from the olfactory epithelium to the olfactory bulb, there is little solid evidence for a topographic organization in the projection from the bulb to the olfactory cortex. While it is possible that a more complex topographic organization may eventually be discovered, on the present evidence it seems likely that spatio-temporal patterns across large regions of the olfactory cortex are be the critical factor in detecting and discriminating different odors

The orbital neocortical region that receives olfactory information also differs from visual or other sensory cortical areas, because it is not solely devoted to olfactory sensation. There are visceral afferents to the same cortical region, including both taste and non-taste afferents, as well as visual and somatic sensory afferents. As the first cortical region where taste and olfactory information come together, the orbital cortex is presumably central to the sensation of flavor, which depends on both chemosensory modalities. In addition, the orbital cortex appears to be generally involved in affective aspects of food (including satiety) as well as sensory aspects, and even in more abstract aspects of reward or aversion. Adjacent areas of the orbital and medial prefrontal cortex have also been implicated in mood and mood disorders.