Scent Work (Nose Work)
Scent Work (or Nose Work) is based on the skills that drug-sniffing dogs use. In Scent Work, dogs are seeking out specific essential oils, such as birch, anise, clove, etc. Dogs have an amazing sense of smell and seem to really enjoy this sport. AKC has trials, as do other organizations, including the National Association of Canine Scent Work.
Here's a link to the AKC Scent Work information.
Challenges for the Dog
The dog usually walks, but must be willing to go through unfamiliar places to find the hidden odors. Must not disturb the items in the search area, and must "alert" the handler when the odor is found.
Challenges for the Handler
The handler walks near the dog - but in this sport, the dog is in charge. The handler must recognize when the dog has found the odor, and must guide the dog to the search area.
The dog learns to find odor quickly, but the key is for the handler to recognize the dog's alert. Assuring the dog is comfortable in several types of environments in which the dog must search.