Emotional processing evolved within brain structures that were originally dedicated to olfactory function. Reduced olfactory function, absence of the olfactory bulb and the experimental removal of the olfactory bulb are associated with depressive behavior. Against this background, we hypothesized that olfactory dysfunction modifies the neural processing of non-olfactory emotion information. Using a functional magnetic resonance imaging design, we therefore tested whether people with and without impaired olfactory function differ in emotional perception and processing. Neural activity of 17 patients with acquired olfactory loss and 23 age- and sex-matched control participants were monitored in the MRI scanner, while they were presented with emotional and neutral pictures. Participants rated the valence and arousal for each picture after scanning. Patients showed reduced right hippocampal brain responses to emotional but not neutral pictures independent of their depressive symptoms. In addition, emotion-dependent activation in the hippocampus and insula was positively associated with the olfactory bulb (OB) volumes in healthy participants. Taken together, these findings suggest a disrupted neural processing of emotional pictures among patients with olfactory loss. This indicates a significant role of the neural olfactory trajectories for general emotion processing. Central emotion processing is reduced in olfactory disorders and relates to the OB volume in normosmic individuals.