The presence of olfactory dysfunction in individuals at higher risk of Alzheimer's disease has significant diagnostic and screening implications for preventive and ameliorative drug trials. Olfactory threshold, discrimination and identification can be reliably recorded in the early stages of neurodegenerative diseases. The current study has examined the ability of various olfactory functions in predicting cognitive decline in a community-dwelling sample. A group of 308 participants, aged 46-86 years old, were recruited for this study. After 3 years of follow-up, participants were divided into cognitively declined and non-declined groups based on their performance on a neuropsychological battery. Assessment of olfactory functions using the Sniffin' Sticks battery indicated that, contrary to previous findings, olfactory discrimination, but not olfactory identification, significantly predicted subsequent cognitive decline (odds ratio = 0.869; P<0.05; 95% confidence interval = 0.764-0.988). The current study findings confirm previously reported associations between olfactory and cognitive functions, and indicate that impairment in olfactory discrimination can predict future cognitive decline. These findings further our current understanding of the association between cognition and olfaction, and support olfactory assessment in screening those at higher risk of dementia.