Exposure to cigarette smoke is a major cause of olfactory dysfunction. However, the underlying mechanisms by which cigarette smoke interferes with the highly regenerative olfactory nerve system remain unclear. To investigate whether cigarette smoke induces olfactory dysfunction by disrupting cell proliferation and cell survival in the olfactory epithelium (OE), we developed a mouse model of smoking that involved intranasal administration of a cigarette smoke solution (CSS). Immunohistological analyses and behavioral testing showed that CSS administration during a period of 24 days reduced the number of olfactory marker protein-positive mature olfactory receptor neurons (ORNs) in the OE and induced olfactory dysfunction. These changes coincided with a reduction in the number of SOX2(+) ORN progenitors and Ki-67(+) proliferating cells in the basal layer of the OE, an increase in the number of caspase-3(+) apoptotic cells, and an increase in the expression of mRNA for the inflammatory cytokines IL-1β and IL-6. Notably, the proliferating ORN progenitor population recovered after cessation of treatment with CSS, resulting in the subsequent restoration of mature ORN numbers and olfaction. These results suggest that SOX2(+) ORN progenitors are targets of CSS-induced impairment of the OE, and that by damaging the ORN progenitor population and increasing ORN death, CSS exposure eventually overwhelms the regenerative capacity of the epithelium, resulting in reduced numbers of mature ORNs and olfactory dysfunction.