Significance For sensitive smell detection, each mammalian olfactory sensory neurons need to express stochastically only one allele of 1 out of possibly more than 1,000 types of olfactory receptors. The mechanism for this monoallelic expression remains as one of the biggest unresolved questions for decades. Using mathematical modeling and computer simulations, we identified a three-layer regulation mechanism the olfactory system adopts to achieve single allelic expression and several other biological requirements such as maximizing the overall diversity of expressed olfactory receptors. The revealed mechanism provides insight for formulating biological processes as multiple-objective optimization problems.