Abstract While recent investigations have revealed viral, inflammatory and vascular factors involved in SARS-CoV-2 lung pathogenesis, the pathophysiology of neurological disorders in COVID-19 remains poorly understood. Yet, olfactory and taste dysfunction are rather common in COVID-19, especially in pauci-symptomatic patients which constitutes the most frequent clinical manifestation of the infection. We conducted a virologic, molecular, and cellular study of the olfactory system from COVID-19 patients presenting acute loss of smell, and report evidence that the olfactory epithelium represents a highly significant infection site where multiple cell types, including olfactory sensory neurons, support cells and immune cells, are infected. Viral replication in the olfactory epithelium is associated with local inflammation. Furthermore, we show that SARS-CoV-2 induces acute anosmia and ageusia in golden Syrian hamsters, both lasting as long as the virus remains in the olfactory epithelium and the olfactory bulb. Finally, olfactory mucosa sampling in COVID-19 patients presenting with persistent loss of smell reveals the presence of virus transcripts and of SARS-CoV-2-infected cells, together with protracted inflammation. Viral persistence in the olfactory epithelium therefore provides a potential mechanism for prolonged or relapsing symptoms of COVID-19, such as loss of smell, which should be considered for optimal medical management and future therapeutic strategies.