The entire olfactory system, except for the olfactory sensory neurons in the nasal cavity, is an intrinsic part of the limb system, conferring olfaction many rarely known functions including the regulation of emotion, memory, and physiological and psychological states, in addition to the general function of smell. Meanwhile, the innermost anatomical structures of the sensory system and the lacking of effective tools make the study of olfactory information coding, processing, transmission and perception processes extremely difficult. The functional magnetic resonance imaging (fMRI) has been broadly used in neuroscience research, because it can repeatedly and non-invasively monitor neuronal activity in any brain region with relatively high temporal and spatial resolutions. Its application has significantly advanced our understanding of olfactory information processing at higher olfactory centers in human brain. Olfactory bulb (OB), the information coding and processing center of the olfactory system, is dedicated to and essential for olfaction. However, the relative small size of human OB, in comparison with the spatial resolution of human fMRI, has been greatly hindering our study of the mechanisms of information coding and processing in the OB. Here the application of fMRI in the olfactory system was reviewed, and focused on the small animal fMRI, its advantages and some important progresses made in the past decade.