A cat’s sense of smell is far better than ours. Cats rely heavily on their sense of smell. The part of the brain called the olfactory bulbs are an important reason why a cat has such an excellent sense of smell. Relative to their size, cats have smaller olfactory bulbs than dogs but substantially larger than ours.

In addition the inside of a cat’s nose has a much larger surface area for trapping smells. This area is about five times larger than ours. One reason for this stark difference is because humans are relatively defective compared to other mammals in respect sense of smell as it is believed we traded of our olfactory ability for better vision.
A cat’s sense of smell is fairly typical of mammals. Dogs have a more acute sense of smell. Air passing into the nose is initially cleaned, moistened and warmed if needed as it passes over skin on a honeycomb of bones called the maxilloturbinals. These are not that large compared to those of dogs because cats do not chase prey over long distances as do dogs. Dogs sniff and run at the same time which can damage the membrane due to dust and cold dry air. Cats sit and wait for prey. This places less strain on the nose’s ‘air conditioning system’.
Then the air carrying the molecules of odor are extracted and decoded on the olfactory membrane. This is also supported by a bony maze called the ethmoturbinals.
Nerve endings in the olfactory membrane trap the molecules which are the source of the smell. The nerves transmit the information to the brain. These nerves are bundled together in groups of between ten and one hundred. Each bundle contains nerves of one kind of receptor. This amplifies the signal. There are several hundred kinds of olfactory receptors. Humans have around one third to one half the number of receptor types as cats.
Cats are believed to be able to ‘discriminate among billions of different odors’.
Source: Cat Sense: The Feline Enigma Revealed.