Most patients with tremor-dominant Parkinson's disease (PD) have impaired smell function but it is unclear whether this is true for subjects with essential tremor (ET). If ET patients do not exhibit meaningful smell loss, then olfactory testing may help to distinguish PD from ET. We assessed olfactory function in 59 ET and 64 tremor-dominant PD patients using the University of Pennsylvania Smell Identification Test (UPSIT) and olfactory event-related potential (OERP). UPSIT scores were compared to those from 245 healthy controls, and OERPs were compared to those from 74 controls. Unlike the PD test scores, those of ET patients were indistinguishable from controls when the effects of age, age of onset, gender, and smoking were taken into account. ET patients with a family history of tremor scored significantly better than controls on the UPSIT, and their rate of decline with age was slower. The effect was not observed on OERP. Smell testing may help to distinguish between ET and tremor-predominant PD, and patients with family history of tremor may represent a subgroup whose olfactory function is enhanced by some unknown mechanism.