The damp conditions that are commonly present in a basement can lead to the growth of mold and mildew, which will cause an unpleasant musty basement odor. If a water pipe has leaked in the basement, this water will eventually evaporate and should not cause lasting mold and mildew problems as a result. A damp foundation is a more likely culprit for a basement odor. Using a dehumidifier and performing a thorough cleaning of the entire basement will help in ridding the basement of the odor. After this is done, the basement and foundation should be properly sealed, providing a water-proof barrier to prevent future growth of mold and mildew.