Olfactory dysfunction is common in Parkinson's disease (PD) and has been attributed to early deposition of α-synuclein pathology in olfactory areas. The pathophysiology of olfactory dysfunction in PD, however, remains poorly understood. Changes in odor identification suggest in part impairment in odor memory, possibly due to hippocampal dysfunction. Olfactory dysfunction occurs also in Alzheimer's disease (AD) and increases with severity of dementia. Cholinergic degeneration is not only a feature of AD but can also occur in PD, at least in a subset of patients with cognitive changes. We reported previously that impaired odor identification in early PD is more closely correlated with hippocampal dopaminergic than nigrostriatal dopaminergic denervation. Results of our multi-tracer PET studies show that odor identification deficits in PD are best predicted by cholinergic denervation and to a lesser extent by dopaminergic denervation. These results suggest that olfactory dysfunction in PD may have multiple components including hippocampal dysfunction secondary to cholinergic and dopaminergic denervations. Olfactory dysfunction in PD may be the most marked in subjects at risk of incipient dementia, and may reflect the transition of PD toward a stage with more heterogeneous multi-system neurodegenerations. Our preliminary imaging data do not support a significant contribution of amyloidopathy or serotoninergic denervation to abnormal olfactory functions in PD, at least in the absence of dementia. We outline how progressive changes in olfaction may be used as a biomarker of cholinergic denervation and cognitive decline in PD patients. We will discuss also the utility of olfactory testing as an early screening test for neurodegeneration.