Introduction Olfactory dysfunction may be present in patients with nasal obstruction and septal deviation. The impact of olfactory dysfunction on the psychological profile and quality of life (QoL) of these patients remains unexplored. Objective The present study aimed to investigate the emotional status and QoL of patients with olfactory dysfunction and septal deviation and to identify predictors associated with clinically significant improvement of psychological status and QoL, focusing mainly on the role of olfactory recovery after septoplasty. Methods The olfactory function was quantitatively assessed using the ''Sniffin' sticks'' test (Burghart Messtechnik GmbH, Wedel, Germany) in 60 patients and 25 controls enrolled in this prospective study. The participants completed validated questionnaires specific for general health (Short Form-36), nasal-symptom related QoL (SinoNasal Outcome Test-22), olfaction-associated QoL (Questionnaire of Olfactory Deficits) and for assessing their psychological state (Short Anxiety Screening Test and Beck Depression Inventory) preoperatively and 6 months postoperatively. The patients used the Glasgow Benefit Inventory to evaluate their personal benefit after septoplasty with. Results Septoplasty led to significantly improved olfactory function. Patients with olfactory impairment had significantly lower nasal-symptom related QoL, higher stress levels, and more depressive mood compared with normosmics and controls before and after septoplasty. Postoperatively, personal benefit from surgery was higher in normosmic patients. Improvement of nasal-symptom related QoL was significantly associated with higher likelihood of clinically significant improvement of patients' psychological profile and more personal benefit from surgery. Olfactory dysfunction was negatively correlated with the emotional status of the patients. Conclusion Olfactory dysfunction appears to significantly affect the psychological status of patients with nasal obstruction, and olfactory recovery improves the patients' perception of personal benefit from septoplasty.