Despite recent evidence indicating that birds can communicate using olfaction, the function of odour in avian communication is still poorly understood. The crimson rosella (Platycercus elegans) species complex is an interesting candidate for studying olfactory signalling. It is often considered a rare example of a ring species, featuring a cline of phenotypically and genetically distinct subspecies, which form a near continuous geographical ring with gene flow. The species also produces a distinct and strong plumage odour, the function of which is unknown. In this study, we combined field and lab-based behavioural experiments, with chemical analyses of the plumage odour to test novel hypotheses about the role of odour in avian signalling. In lab-based choice experiments, both males and females were able to discriminate between their own species plumage odour over a competitive heterospecific plumage odour. Manipulating odours placed at nestbox entrances during incubation, we found that female P. e. elegans could detect odour differences between species, subspecies and conspecific sexes. Field experiments also revealed that ringtail (Pseudocheirus peregrinus) and brushtail possums (Trichosurus vulpecula) could distinguish the odour of P. elegans. This suggests likely costs to avian plumage odour, by revealing that the odour is detectable to probable predators and competitors of the species. Using gas chromatography mass spectrometry (GCMS) of P. elegans plumage, we found chemical differences between subspecies, season, sex and age. This provides the first evidence that plumage odour composition can vary between avian subspecies, and may act as a signal for subspecies recognition in the P. elegans complex. Taken together, our data suggest that olfaction may play a more important role in communication for P. elegans than previously realised, and has the potential to contribute to the maintenance of diversity in this putative ring species.