The vertebrate olfactory system has become an important model for the study of neural regeneration. The most remarkable feature of this system is its unique capacity for neurogenesis and replacement of degenerating receptor neurons. This replacement is made possible by a persistent neurogenesis among basal cells. Basal cells differentiate, develop into sensory neurons and grow axon processes. Receptor cell axons project back to the olfactory bulb where they reestablish connections with the central nervous system. When mature receptors reach a critical age, are damaged by nerve injury, or are exposed to environmental agents that enter the nasal cavity, they degenerate and are subsequently replaced by newly regenerated receptor cells. Recent experiments demonstrate that olfactory neurogenesis is not simply an extension of growth and development but is a unique capacity for cell replacement that persists beyond maturity and well into old age. Even more remarkable is the finding that replacement receptor cells re-establish connections with the CNS and restore sensory function. It is expected that further studies of olfactory neurogenesis using cell and tissue culture methods will provide important advances for the field of neural regeneration.