This is the 2745th most frequent Japanese word.
臭
"臭" means "smell" or "odor," often implying an unpleasant scent.
臭い (におい) is used here as an adjective to describe an unpleasant smell.
この部屋は臭いがします。
This room smells bad.
臭う (におう) is used here as a verb to indicate emitting a strong, often unpleasant smell.
腐った魚は臭う。
The rotting fish smells.
臭い (におい) figuratively suggests a metaphorical 'smell' to imply suspicion or unease.