The sense of smell (olfaction) arises from the stimulation of the olfactory receptors by activation from gas molecules that pass by the nose during respiration. The resulting electrical activity is transduced into the olfactory bulb which then transmits the electrical activity to other parts of the central nervous system via the olfactory tract.
The olfactory nerve is the shortest of all the twelve cranial nerves and only one of two cranial nerves (the other being the optic nerve) that do not join with the brainstem.