Background: Individuals with hyposmia, or the partial loss of smell, represent a large sector (15%) of the population that is likely to grow with the current aging population; however, our understanding to how hyposmics centrally process odors is still not clear. One popular non-invasive tool for in vivo imaging of biological activity among human brains has been function magnetic resonance imaging (fMRI) which uses blood-oxygenation level dependent (BOLD) signal as an indirect measurement. Therefore, the aim of this study was to understand differences in olfaction processing between patients with hyposmia and healthy controls using functional magnetic resonance imaging (fMRI). Methodology: Eleven hyposmic and 12 healthy, normosmic subjects were exposed to two different food-related odors (coffee and peach) during a block-designed fMRI session. Additionally, odor perception qualities were rated for each odor throughout the scanning session. Results: The activations of the normosmic group were localized in typical olfactory areas (insula, orbitofrontal cortex [OFC], limbic system and amygdala). The hyposmic group showed similar regions of activation (insula, OFC, limbic system), however, less activation was found in the amygdala, left anterior cingulate and right OFC, but higher activation was shown in the right parahippocampal and both the left and right posterior cingulate gyrus which are assumed to play an important role in the processing and remembrance of memories. Conclusions: These results indicate similar central olfactory processing among groups, yet subjects with partial loss may attempt to compensate smell impairment with odor memory or higher motivation to smell.