Our understanding of the molecular and cellular organization of the Drosophila melanogaster olfactory system has increased dramatically in recent years. A large family of approximately 60 odorant receptors has been identified, and many of these receptors have been functionally characterized. The odor responses of olfactory receptor neurons have been characterized, and much has been learned about how odors are represented in olfactory centers in the brain. The circuitry of the olfactory system has been studied in detail, and the developmental mechanisms that specify the wiring and functional diversity of olfactory neurons are becoming increasingly well understood. Thus, functional, anatomical and developmental studies are rapidly being integrated to form a unified picture of odor coding in this model olfactory system.