A film formed from a water-soluble polymer matrix within which is contained at least one fragrance is provided. The film is water-sensitive (e.g., water-soluble, water-dispersible, etc.) so that upon contact with a sufficient amount of water, the polymer matrix loses its integrity over time to increasingly expose the fragrance to the ambient environment for releasing its odor. The ability to incorporate a fragrance into the polymer matrix is achieved in the present invention by controlling a variety of aspects of the film construction, including the nature of the fragrance, the nature of the water-soluble polymer, the manner in which the polymer matrix and fragrance are melt processed, etc. For example, the fragrance may be injected directly into the extruder and melt blended with the water-soluble polymer. In this manner, the costly and time-consuming steps of pre-encapsulation or pre-compounding of the fragrance into a masterbatch are not required. Furthermore, to obtain a balance between the ability of the fragrance to release the desired odor during use and likewise to minimize the premature exhaustion of the odor during melt processing, the fragrance is selected to have a boiling point (at atmospheric pressure) within a certain range, such as from about 125° C. to about 350° C.