Abstract The cardinal tetra Paracheirodon axelrodi belongs to the family Characidae, an economically important and morphologically diverse family of fishes. Information on the olfactory system of this species is scattered and scarce. Among teleost fishes, differences exist in the shape, number, and arrangement of the olfactory lamellae, in the distribution of the sensory and nonsensory epithelium, as well as in the abundance of various receptor cell types. Here, an anatomical and morphological description of the olfactory system was carried out using light microscopic histology, immunohistochemistry, scanning electron microscopy, and transmission electron microscopy. P. axelrodi is a ditremous and isosmat species. It has an arrow‐shaped olfactory rosette arrangement. The olfactory epithelium is covering the 12–14 lamellae of the olfactory rosette and, using scanning electron microscopy, we observed that the apical surface of the olfactory epithelium carries a dense layer of mucus. Based on the histological, immunohistochemical, and ultrastructural descriptions, all characteristic sensory and nonsensory cell types of the olfactory epithelium of teleost fish were identified. Three types of olfactory receptor neurons were identified: ciliated, microvilli, and crypt cells. The distribution of sensory and nonsensory cell types is like that described in Aphyocharax anisitsi , another species of the Characidae family. A. anisitsi inhabits slow‐flowing water bodies with high‐density vegetation such as P. axelrodi .