Acute stress alters olfactory perception. However, little is known about the neural processing of olfactory stimuli after acute stress exposure and the role of cortisol in such an effect. Here, we used an event-related olfactory fMRI paradigm to investigate brain responses to odors of different valence (unpleasant, pleasant, or neutral) in healthy young adults following an acute stress (Trier Social Stress Test, TSST) induction (N = 22) or a non-stressful resting condition (N = 22). We obtained the odor pleasantness, intensity, and familiarity ratings after the acute stress induction or resting condition. We also measured the participants' perceived stress and salivary cortisol at four time points during the procedure. We found a stress-related decrease in brain activation in response to the pleasant, but not to the neutral or unpleasant odor stimuli in the right piriform cortex extending to the right amygdala, the right orbitofrontal cortex, and the right insula. In addition, activation of clusters within the regions of interest were negatively associated with individual baseline-to-peak increase in salivary cortisol levels after stress. We also found increased functional connectivity between the right piriform cortex and the right insula after stress when the pleasant odor was presented. The strength of the connectivity was positively correlated with increased perceived stress levels immediately after stress exposure. These results provide novel evidence for the effects of acute stress in attenuating the neural processing of a pleasant olfactory stimulus. Together with previous findings, the effect of acute stress on human olfactory perception appears to depend on both the valence and the concentration (e.g., peri-threshold or suprathreshold levels) of odor stimuli.