Background: While valid and reliable olfactory tests have been developed for children aged >5 years, olfactory testing has not systematically been evaluated in younger children. The aim of this study was to evaluate the reliability and validity of the “U-Sniff” odor identification test in children aged 3–6 years. Methods: We included 160 healthy children (age range 3–6 years) and 14 congenitally anosmic children. Participants were investigated in two identical sessions. The “U-Sniff” test was used to evaluate olfactory function. A picture identification test (PIT) and the Kasel-Concentration-Task (KKA) were administered to identify factors influencing odor identification performance. Results: Age significantly influenced odor identification performance, with older children achieving higher scores. PIT and KKA scores correlated positively with odor identification scores. The “U-Sniff” test demonstrated a high test–retest reliability (r₁₆₀ = 0.75, p < 0.001). It was possible to distinguish between healthy and anosmic children by means of “U-Sniff” scores starting at age 4 years with high sensitivity (79–93%) and specificity (88–95%). Conclusions: The “U-Sniff” test is feasible for children starting at age 3 years. In children aged ≥4 years, it is a reliable and valid method to distinguish between normal olfactory function and anosmia. Impact: Olfactory testing is reliable and valid starting at an age of 4 years.The study adds a systematic evaluation of olfactory testing in young children.Results of this study are especially interesting for clinicians in the diagnosis of olfactory dysfunction.