Purpose Olfactory dysfunction in chronic rhinosinusitis with nasal polyps (CRSwNP) is a severe type of inflammatory olfactory disorders which greatly impair quality of life. The aim of this review is to summarize the current literature and to provide a comprehensive guide to the key metrics of the olfactory dysfunction, evaluations, treatment responses, and pathophysiological mechanisms in CRSwNP patients with olfactory dysfunction. Methods A review of the literature for olfaction in CRSwNP was conducted. The key terms ("chronic rhinosinusitis", "nasal polyps", and "olfaction") were used to search relevant articles in Pubmed. Results Inflammation within the olfactory cleft is a well-recognized cause of the olfactory loss in patients with CRSwNP. Although the current treatment could significantly improve the olfactory function, olfaction in patients with CRSwNP tends to deteriorate after temporary improvement. Recent research has focused on the change of olfactory cleft and its association with the olfactory function which shed light on the mechanisms of both conductive and sensorineural olfactory dysfunctions in patients with CRSwNP. The state of the olfaction in patients with CRSwNP is directly associated with the degree of inflammation control and disturbed normal turnover of the olfactory sensory neurons induced by chronic inflammation, especially the eosinophilic inflammation contributes to the olfactory dysfunction. Refractory factors contributing to the olfactory deterioration are the promising therapeutic target to maintain the olfactory function in patients with CRSwNP. Conclusions The current evidence supports temporary olfactory improvement in CRSwNP patients which accords with the refractory nature of CRSwNP. Future treatment should aim to the continuous elimination of inflammation and promote the normal turnover of the olfactory epithelium.