Human olfaction can be extraordinarily sensitive, and its most common assessment method is odor identification (OID), where everyday odors are matched to word labels in a multiple-choice format. However, many older persons are unable to identify familiar odors, a deficit that is associated with the risk of future dementia and mortality. The underlying processes subserving OID in older adults are poorly understood. Here, we analyzed error patterns in OID to test whether errors could be explained by perceptual and/or semantic similarities among the response alternatives. We investigated the OID response patterns in a large, population-based sample of older adults in Sweden (n = 2479; age 60–100 years). Olfaction was assessed by a ‘Sniffin ́ TOM OID test with 16 odors; each trial involved matching a target odor to a correct label among three distractors. We analyzed the pattern of misidentifications, and the results showed that some distractors were more frequently selected than others, suggesting cognitive or perceptual factors may be present. Relatedly, we conducted a large online survey of older adults (n = 959, age 60–90 years) who were asked to imagine and rate the perceptual similarity of the target odors and the three corresponding distractors (e.g. “How similar are these smells: apple and mint?”). We then used data from the Swedish web corpus and the Word2Vec neural network algorithm to quantify the semantic association strength between the labels of each target odor and its three distractors. These data sources were used to predict odor identification errors. We found that the error patterns were partly explained by both the semantic similarity between target-distractor pairs, and the imagined perceptual similarity of the target-distractor pair. Both factors had, however, a diminished prediction in older ages, as responses became gradually less systematic. In sum, our results suggest that OID tests not only reflect olfactory perception, but also likely involve the mental processing of odor-semantic associations. This may be the reason why these tests are useful in predicting dementia onset. Our insights into olfactory-language interactions could be harnessed to develop new olfactory tests that are tailored for specific clinical purposes.