The epigenetic modifier SMCHD1 is involved in gene regulation at all scales. We have previously shown it has at least two independent functions. First, targeted gene silencing at specific loci such as Hox genes during embryonic development or at the FSHD muscular dystrophy repeat D4Z4. Second, mediating long-range chromatin interactions across the genome, notably between clusters including Hox, keratin or olfactory receptor (OR) clusters. OR genes are expressed in a monogenic and monoallelic fashion in a constantly replenishing population of olfactory sensory neurons (OSNs) in the main olfactory epithelium (MOE) of tetrapods. We find that SMCHD1 has two distinct roles within the mouse olfactory system, first by keeping OR genes repressed in late-stage embryonic MOE. Surprisingly, this function does not continue into adults, where SMCHD1 is instead involved in the differentiation of OSN progenitors by regulating the relative expression levels of Nfia, Nfib and Nfix, the three transcription factors that govern the spatial identity of each neuron by their expression patterns at those progenitor stages. Lack of Smchd1 causes a downregulation of all three transcription factors, pointing to indirect action since SMCHD1 is an epigenetic repressor. Paradoxically to our embryo data, dorsomedial ORs are overrepresented in Smchd1 null adults. This shift in neuron zonal identity is starker at the progenitor stages than the mature neurons and does not translate into a measurable defect in smelling acuity in our behavioural testing. Using single-cell transcriptomics, we examined each stage of MOE cell progression and found a very short window in differentiation characterised by very high levels of Smchd1 expression. Although Smchd1 null cells seem to get partially stuck when entering that stage, they can still progress through without ultimately disrupting the steady-state composition of the tissue. This Smchd1-sensitive window provides a promising system to gain insights into SMCHD1’s still unknown molecular mechanisms.