The canine nose has many primary receptor cells as the nose of a human. One of the greatest scientific wonders of the world is how a dog detects odors. Studies in a number of species have discovered that different regions of the mucous lining within the nose have variety chemical properties, readily absorbing chemicals of one particular molecular shape or another. It is preferentially absorbing in one region chemicals that are more water soluble and in other chemicals that are more fat soluble.

The ability of the nose to make accurate chemical distinctions is astonishing. Some chemicals that exist in nature are the same in every way - they are made up of exact elements, combined together in exactly the same three-dimensional sequence with the exception of one that is the three-dimensional mirror image of the other. Yet such "stereoisomers" often have a dramatically different odor, indicating that the nose can sort them out by their complex shape. For instance, the molecule carvone has the odor of caraway in one of its stereoisomers, the odor of spearmint in its mirror-image form.

Measurements of the acuity of the dog's nose suggest that he is more sensitive than man to the presence of minute quantities of odor molecules floating in the atmosphere, however, the data is all over the map. This is probably due to the fact that the threshold for detecting different chemicals varies greatly according to the particular chemical involved. Some comparative studies have discovered that dogs can detect certain organic chemicals at concentrations a 100 times less than humans are able to; for other compounds, the dog's edge may be a factor of more than a million. In police work, dogs can identify the odor from natural gas leaks, concealed narcotics, explosives, and currency, all at levels below the threshold at which people are aware of the odor.

In controlled studies, pets can detect human scent on a glass slide that had been lightly fingerprinted and then left outside for two weeks, or indoors for as much as thirty days; they could pick six identical steel tubes had been held in the hands of a human for no more than five seconds. Dogs can even differentiate between shirts worn by twins who ate different meals, or by two non-identical twins who lived in the same location and ate the same foods.

Dogs have the ability to choose particular odors of interest from a flurry of competing smells and distinguish them – this is a dog’s most impressive olfactory achievement. This capability is a mirror image of the dog's superior olfactory computing powers. It requires not just smelling but evaluating. Dogs have no instinctive interest in the smell of humans, narcotics, or fifty-dollar bills. However, if a dog is trained frequently to focus on certain categories of smells, they can perform astounding achievements of cross-matching.