We and others previously showed that in mouse embryos lacking the transcription factor Sox10, olfactory ensheathing cell (OEC) differentiation is disrupted, resulting in defective olfactory axon targeting and fewer gonadotropin‐releasing hormone (GnRH) neurons entering the embryonic forebrain. The underlying mechanisms are unclear. Here, we report that OECs in the olfactory nerve layer express
Frzb
—encoding a secreted Wnt inhibitor with roles in axon targeting and basement membrane breakdown—from embryonic day (E)12.5, when GnRH neurons first enter the forebrain, until E16.5, the latest stage examined. The highest levels of
Frzb
expression are seen in OECs in the inner olfactory nerve layer, abutting the embryonic olfactory bulb. We find that
Sox10
is required for
Frzb
expression in OECs, suggesting that loss of Frzb could explain the olfactory axon targeting and/or GnRH neuron migration defects seen in
Sox10
‐null mice. At E16.5,
Frzb
‐null embryos show significant reductions in both the volume of the olfactory nerve layer expressing the maturation marker Omp and the number of Omp‐positive olfactory receptor neurons in the olfactory epithelium. As Omp upregulation correlates with synapse formation, this suggests that
Frzb
deletion indeed disrupts olfactory axon targeting. In contrast, GnRH neuron entry into the forebrain is not significantly affected. Hence, loss of Frzb may contribute to the olfactory axon targeting phenotype, but not the GnRH neuron phenotype, of
Sox10
‐null mice. Overall, our results suggest that Frzb secreted from OECs in the olfactory nerve layer is important for olfactory axon targeting.