This study extends the research on shared book reading (SBR) by specifically examining the role of smell in parent-child SBR sessions observed at home. Drawing on qualitative methods, we analysed the verbal engagement of ten Norwegian families and their three to five-year-olds reading an olfactory book (the scratch-and-sniff book "Peter Follows His Nose"). We followed socio-semiotic theorisations (Kress and Van Leeuwen 2002), to critically evaluate the role of olfaction as a communicative resource in SBR. We outline the principal ways in which smell fulfils three linguistic metafunctions during adult-child SBR with olfactory storybooks: the interpersonal function of signalling individual interests, the textual function of creating a dialogic space and the ideational function of revealing divergent interpretations. We propose that olfaction can be seen as a semiotic mode in SBR, which similarly to colour, has distinct grammar and systematic communication properties, with unique multimodal qualities.