The olfactory epithelium is a specialized epithelial tissue inside the nasal cavity that is involved in smell. In humans, it measures about 3 square centimeters (on each side) and lies on the roof of the nasal cavity about 7 cm above and behind the nostrils.he olfactory epithelium is a specialized epithelial tissue inside the nasal cavity that is involved in smell. In humans, it measures about 3 square centimeters (on each side) and lies on the roof of the nasal cavity about 7 cm above and behind the nostrils.