When sniffing a flower, odour molecules from it are drawn to the top of the nose, or olfactory cleft, as we breathe in.  They then dissolve in a layer of mucus membrane known as the olfactory epithelium.  This ‘drawing in’ of air is aided by the turbinates; bony cushions inside the nose which not only help direct the airflow but also warm, humidify and filter the air as it passes over them.  Sniffing improves this process by increasing the flow of air.

Once the odour molecules have dissolved in the mucus, they spread through it (or are carried by special proteins) and attach to hair-like structures called cilia.  The cilia are attached to receptor cells, as shown in the animation.  The odour molecules then bind with the receptor cells themselves which then generate a signal, or impulse.

These signals are passed along tiny nerve fibres called axons, which pass through tiny perforations in the cribriform plate, a layer of bone in the base of the skull.  Bundles of many thousands of these axons together make up the olfactory nerve, much like the individual copper strands in an electrical cable.  They converge on the edges of the olfactory bulb, a structure on the frontal lobe of the brain (there is actually one on each side of the brain, one for each nostril).

The olfactory bulb is responsible for processing the signals it receives from the receptors,  and passing this information on to other parts of the brain, including the thalamus, limbic system and the orbitofrontal neocortex.  The role the limbic system plays in further processing the information it receives from the olfactory bulb is of particular interest; see Psychology and Smell for more information.