The initial step in the recognition of odors occurs when individual odorant molecules enter the nasal cavity and interact with the sensory endings of neurons located in the olfactory epithelium. These neurons are unique in several respects. First, they are directly accessible to the external environment. Second, perhaps because of their exposure to toxic substances in the environment, they degenerate and are replenished continuously from a population of stem cells at the base of the epithelium. Third, the sensory neurons born in the olfactory epithelium of adults retain the ability to differentiate and establish synaptic contact with target cells in the mature olfactory bulb. These unique features, which are conserved phylogenetically (for example, see Blaustein et al), provide substantial rationale for studying neuronal genesis and differentiation in the olfactory epithelium. We will summarize much of what is currently known about the development of the olfactory epithelium, the birth and differentiation of olfactory receptor neurons, and the molecular correlates of these events.