Olfaction is a very important sensation for all animals. Recently great progress has been made in the research of olfactory transduction. Especially the novel finding of the gene superfamily encoding olfactory receptors has led to rapid advances in olfactory transduction. These advances also promoted the research of biomimetic olfactory-based biosensors and some obvious achievements have been obtained due to their potential commercial prospects and promising industrial applications. This paper briefly introduces the biological basis of olfaction, summarizes the progress of olfactory signal transduction in the olfactory neuron, the olfactory bulb and the olfactory cortex, outlines the latest developments and applications of biomimetic olfactory-based biosensors. Finally, the olfactory biosensor based on light addressable potentiometric sensor (LAPS) is addressed in detail based on our recent work and the research trends of olfactory biosensors in future are discussed.