Using a whole-cortex magnetoencephalograph, magnetic field changes were recorded to describe brain activities related to simultaneous visual and olfactory processing and to detect odor-related influences on verbal information processing. Words had to be either shallowly (nonsemantic) or deeply (semantic) encoded by healthy young subjects, each of these tasks under two different kinds of olfactory stimulation. After each encoding phase, word recognition performance was tested. First, the odor was randomly associated with some of the study words (simultaneous stimulation; same duration as for words) for both depths of word processing conditions, and second, continuous olfactory stimulation (permanent stimulation) was provided during the whole study phases of both depths of word processing conditions. The statistical analysis of the physiological data revealed evidence of a specific odor-induced effect depending on depth of word processing and kind of olfactory stimulation. Brain activity between about 250 and 450 ms as well as between about 650 and 1000 ms after stimulus onset was found to vary as a function of odor delivery and depth of word processing. In addition, a significant effect of odor stimulation on subsequent word recognition performance occurred in case of simultaneous odor stimulation and semantic word encoding. It is interpreted that in this case, word recognition performance significantly decreased because of the presence of the odor during prior word encoding. Such a behavioral effect was missing in all other conditions. The present psychological and physiological findings support the idea that semantic word encoding is specifically affected by simultaneous olfactory information processing. It is concluded that this phenomenon is due to a competition with cortical regions related to language and olfactory information processing, as suggested by T. S. Lorig (1999, Neurosci. Biobehav. Rev. 23, 391-398).