Insects identify and evaluate behaviorally relevant odorants in complex natural scenes where odor concentrations and mixture composition can change rapidly. This requires fast and reliable information processing in the olfactory system. Here, we review recent experimental findings and theoretical hypotheses on olfactory processing in the honeybee with a focus on its temporal dynamics. Specifically we address odor response characteristics of antennal lobe interneurons and projection neurons, local processing of elemental odors and odor blends, the functional role of the dual olfactory pathway in the honeybee, population coding in uniglomerular projection neurons, and a novel model for sparse and reliable coding in projection neurons and mushroom body Kenyon cells. It is concluded that the olfactory system of the honeybee implements a fast and reliable coding scheme optimized for processing dynamic input within the behaviorally relevant temporal range.