Olfactory loss is a prominent symptom in Parkinson's disease (PD), and it is found in about 80-90% of patients. The high frequency of olfactory dysfunction in PD was not realized until recently, when more sophisticated tools for its measurement became available. In earlier studies olfactory dysfunction (1) seemed to be unrelated to disease duration, (2) did not correlate with motor function, and (3) was uninfluenced by anti-Parkinsonian medication. By olfactory evoked potential (OEP) recording prolonged latencies were seen in PD patients, and a correlation between disability and latency to OEP was demonstrated. Olfactory function is differentially impaired in distinct Parkinsonian syndromes. Preserved or mildly impaired olfactory function is more likely to be related to atypical parkinsonism such as multiple system atrophy, progressive supranuclear palsy or corticobasal degeneration. The presented data suggest that inexpensive olfactory tests may significantly enhance the diagnostic armamentarium in the differential and early diagnosis of PD. Patients with PD exhibit a specific decrease of olfactory function which appears to take place during very early stages of the disease. Evidence for olfactory disturbance in PD is reviewed from pathological and neurophysiological standpoints.