The nerve fibers of the first cranial nerve, the olfactory nerve (CN I), exit the skull through the cribriform plate and terminate on the olfactory mucosa as olfactory cells. The olfactory mucosa is found high in the nasal cavity and it is quite difficult to distinguish the difference between the olfactory mucosa and the respiratory mucosa of the nasal cavity with the naked eye.
Histologically speaking, olfactory mucosa does differ however, from respiratory mucosa as it carries specialized sensory organs for smell known as the olfactory cells. These cells contain sensory nerve fibers. Each olfactory cell has a refractory period which means that whenever a new smell enters the nasal cavity, certain areas of the olfactory mucosa are stimulated each time. In other words, this allows the olfactory cells to always remain sensitive to new incoming olfactory stimuli.
Other than the hippocampus, the olfactory mucosa is the only other part of the central nervous system (CNS) where regeneration of neurons occurs.
Damage to the olfactory mucosa can lead to a localized loss of the sense of smell. This localized loss of the sense of smell can also occur naturally with old age or as a result of a bad cold, in which case the effects are reversible.
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