The ability to identify chemical cues in the environment is essential to most animals. Apart from marine larval stages, anomuran land hermit crabs (Coenobita) have evolved different degrees of terrestriality, and thus represent an excellent opportunity to investigate adaptations of the olfactory system needed for a successful transition from aquatic to terrestrial life. Although superb processing capacities of the central olfactory system have been indicated in Coenobita and their olfactory system evidently is functional on land, virtually nothing was known about what type of odourants are detected. Here, we used electroantennogram (EAG) recordings in Coenobita clypeatus and established the olfactory response spectrum. Interestingly, different chemical groups elicited EAG responses of opposite polarity, which also appeared for Coenobita compressus and the closely related marine hermit crab Pagurus bernhardus. Furthermore, in a two-choice bioassay with C. clypeatus, we found that water vapour was critical for natural and synthetic odourants to induce attraction or repulsion. Strikingly, also the physiological response was found much greater at higher humidity in C. clypeatus, whereas no such effect appeared in the terrestrial vinegar fly Drosophila melanogaster. In conclusion, our results reveal that the Coenobita olfactory system is restricted to a limited number of water-soluble odourants, and that high humidity is most critical for its function.