One method used to establish parosmia is the University of Pennsylvania Smell Identification Test, or UPSIT. "Sniffin' Sticks" are another method that can be used to properly diagnose parosmia. These different techniques can also help deduce whether a specific case of parosmia can be attributed to just one stimulating odor or if there is a group of stimulating odors that will generate the displaced smell. One case study performed by Frasnelli "et al." offers a situation where certain smells, specifically coffees, cigarettes, onions, and perfumes, induced a "nauseating" odor for the patient, one which was artificial but unable to be aptly related to another known smell. In another case study cited in the same paper, one woman had parosmia in one nostril but not the other. Medical examinations and MRIs did not reveal any abnormalities; however the parosmia in this case was degenerative and only got worse with time. The authors do comment, however, that cases of parosmia can predict regeneration of olfactory senses.

Olfactory dysfunction can be quantitative and/or qualitative. Quantitative smell disorders refer to disorders in which there is complete or partial loss of olfaction. Anosmia, the complete loss of olfaction, and hyposmia, the partial loss of olfaction are the two disorders classified as quantitative because they can be measured. Qualitative smell disorders can’t be measured and refer to disorders in which there is alternation or distortion in the perception of smell. Qualitative disorders include parosmia (also called troposmia) and phantosmia. The term dysosmia refers to a qualitative olfaction disorder and include both parosmia and phantosmia. Olfactory dysfunction including anosmia, hyposmia, and dysosmia can be either bilateral or unilateral on either nostril. Anosmia only on the left nostril would be termed unilateral left anosmia while bilateral anosmia would be termed total anosmia.

Parosmia refers to a distortion in the perception of an odorant. Odorants smell different from what one remembers. A more specific term, cacosmia, refers to an unpleasant perception of an odorant due to nasosinusal or pharyngeal infection.

Parosmia (from the Greek παρά "pará" and ὀσμή "osmḗ"), also known as troposmia (Gk.) or cacosmia (Gk.), is an olfactory dysfunction that is characterized by the inability of the brain to properly identify an odor's "natural" smell.

What happens instead, is that the natural odor is transcribed into what is most often described as an unpleasant aroma, typically a "'burned,' 'rotting,' 'fecal,' or 'chemical' smell".

There are instances, however, of pleasant odors; this is more specifically called euosmia (Greek).

Phantosmia (phantom smell), also called an olfactory hallucination, is smelling an odor that is not actually there. It can occur in one nostril or both. Unpleasant phantosmia, cacosmia, is more common and is often described as smelling something that is burned, foul, spoiled, or rotten. Experiencing occasional phantom smells is normal and usually goes away on its own in time. When hallucinations of this type do not seem to go away or when they keep coming back, it can be very upsetting and can disrupt an individual's quality of life.

Olfactory hallucinations can be caused by common medical conditions such as nasal infections, nasal polyps, or dental problems. It can result from neurological conditions such as migraines, head injuries, strokes, Parkinson's disease, seizures, or brain tumors. It can also be a symptom of certain mental disorders such as depression, bipolar disorder, intoxication or withdrawal from drugs and alcohol, or psychotic disorders. Environmental exposures are sometimes the cause as well, such as smoking, exposure to certain types of chemicals (e.g., insecticides or solvents), or radiation treatment for head or neck cancer.

A physician can determine if the problem is with the sense of smell (olfactory system) or taste (gustatory system), or if it is caused by a neurological or psychiatric disorder. Phantosmia usually goes away on its own, though this can sometimes be gradual and occur over several years. When caused by an illness (e.g., sinusitis), it should go away when the illness resolves. If the problem persists or causes significant discomfort, a doctor might recommend nasal saline drops, antidepressant or anticonvulsant medications, anesthesia to parts of the nose, or in very rare circumstances, surgical procedures to remove the olfactory nerves or bulbs.

Other olfactory disorders such as hyposmia and anosmia have been found to be a symptom of mood disorders (depression). However, it is not known what olfactory disorders occur and if they are indeed a symptom of a depressive disorder.

It has been found that phantosmia may be an early sign of the neurodegenerative disease Parkinson's disease. It may also be a sign of an intracranial hemorrhage (brain tumours or epilepsy).

Other studies have also found that the symptoms of phantosmia have been alleviated after the patient has been treated for depression.

Another case of a 70-year-old male reported that his first abnormal symptoms were irregular bowel movements. After this the patient developed irregular eye movements and had developed a sleep and behavior disorder after this he developed phantosmia; which was described to be as "stinky and unpleasant". The patient did not display the following symptoms: loss of awareness, confusion, automatisms, convulsive seizures, auditory/visual hallucinations.

A hallucination is a perception in the absence of external stimulus that has qualities of real perception. Hallucinations are vivid, substantial, and are perceived to be located in external objective space. They are distinguishable from several related phenomena, such as dreaming, which does not involve wakefulness; pseudohallucination, which does not mimic real perception, and is accurately perceived as unreal; illusion, which involves distorted or misinterpreted real perception; and imagery, which does not mimic real perception and is under voluntary control. Hallucinations also differ from "delusional perceptions", in which a correctly sensed and interpreted stimulus (i.e., a real perception) is given some additional (and typically absurd) significance.

Hallucinations can occur in any sensory modality—visual, auditory, olfactory, gustatory, tactile, proprioceptive, equilibrioceptive, nociceptive, thermoceptive and chronoceptive.

A mild form of hallucination is known as a "disturbance", and can occur in most of the senses above. These may be things like seeing movement in peripheral vision, or hearing faint noises and/or voices. Auditory hallucinations are very common in schizophrenia. They may be benevolent (telling the subject good things about themselves) or malicious, cursing the subject, etc. Auditory hallucinations of the malicious type are frequently heard, for example people talking about the subject behind his/her back. Like auditory hallucinations, the source of the visual counterpart can also be behind the subject's back. Their visual counterpart is the feeling of being looked or stared at, usually with malicious intent. Frequently, auditory hallucinations and their visual counterpart are experienced by the subject together.

Hypnagogic hallucinations and hypnopompic hallucinations are considered normal phenomena. Hypnagogic hallucinations can occur as one is falling asleep and hypnopompic hallucinations occur when one is waking up. Hallucinations can be associated with drug use (particularly deliriants), sleep deprivation, psychosis, neurological disorders, and delirium tremens.

The word "hallucination" itself was introduced into the English language by the 17th century physician Sir Thomas Browne in 1646 from the derivation of the Latin word "alucinari" meaning to wander in the mind. For Browne, hallucination means a sort of vision that is "depraved and receive[s] its objects erroneously".

Hallucinations may be manifested in a variety of forms. Various forms of hallucinations affect different senses, sometimes occurring simultaneously, creating multiple sensory hallucinations for those experiencing them.