The bHLH transcription factor Olig2 is required for sequential cell fate determination of both motor neurons and oligodendrocytes and for progenitor proliferation in the central nervous system. However, the role of Olig2 in peripheral sensory neurogenesis remains unknown. We report that Olig2 is transiently expressed in the newly differentiated olfactory sensory neurons (OSNs) and is down-regulated in the mature OSNs in mice from early gestation to adulthood. Genetic fate mapping demonstrates that Olig2-expressing cells solely give rise to OSNs in the peripheral olfactory system. Olig2 depletion does not affect the proliferation of peripheral olfactory progenitors and the fate determination of OSNs, sustentacular cells, and the olfactory ensheathing cells. However, the terminal differentiation and maturation of OSNs are compromised in either Olig2 single or Olig1/Olig2 double knockout mice, associated with significantly diminished expression of multiple OSN maturation and odorant signaling genes, including Omp, Gnal, Adcy3, and Olfr15. We further demonstrate that Olig2 binds to the E-box in the Omp promoter region to regulate its expression. Taken together, our results reveal a distinctly novel function of Olig2 in the periphery nervous system to regulate the terminal differentiation and maturation of olfactory sensory neurons.