Background Ray-finned fishes (Actinopterygii) perceive their environment through a range of sensory modalities, including olfaction. Anatomical diversity of the olfactory organ suggests that olfaction is differentially important among species. To explore this topic, we studied the evolutionary dynamics of the four main gene families (OR, TAAR, ORA/VR1 and OlfC/VR2) coding for olfactory receptors in 185 species of ray-finned fishes. Results The large variation in the number of functional genes, between 28 in the ocean sunfish Mola mola and 1317 in the reedfish Erpetoichthys calabaricus , is the result of parallel expansions and contractions of the four main gene families. Several ancient and independent simplifications of the olfactory organ are associated with massive gene losses. In contrast, Polypteriformes, which have a unique and complex olfactory organ, have almost twice as many olfactory receptor genes as any other ray-finned fish. Conclusions We document a functional link between morphology of the olfactory organ and richness of the olfactory receptor repertoire. Further, our results demonstrate that the genomic underpinning of olfaction in ray-finned fishes is heterogeneous and presents a dynamic pattern of evolutionary expansions, simplifications, and reacquisitions.