The sensory system gauges the external environment to maintain homeostasis and regulate the behaviour of animals. One of the sensory modalities, olfaction, has gained much attention in recent years due to its direct impact on the successful survival of animals. Research conducted on human, vertebrate and invertebrate model systems has revealed that the odor perception capability of an animal not only helps in the identification of palatable, stale or toxic items, but also regulates the entire gamut of physiological functions such as appetite, lipid storage, metabolic health, life span and immunity. Moreover, olfactory function is one of the important parameters associated with progression, susceptibility and diagnosis of various diseases. The olfactory capacity of some animals can be utilised to diagnose human diseases, while olfactory impairment may be an early indicator of underlying pathology, such as neurological and infectious diseases. Understanding the link between olfaction and animal health may help in enhancing longevity, improving diagnosis and treatment of diseases. This review summarizes the recent studies conducted on human and animal model systems, emphasizing the role of odor perception in health and disease. At the end, we have discussed the olfactory abnormalities associated with various disorders and use of olfactory function of animals in diagnosing human diseases.