Water in a basement will cause mold and mildew to grow, and will lead to a musty basement odor. Use a dehumidifier and clean the entire basement carefully. Obviously, removing any items that may have developed mold or mildew, such as carpeting, will help rid the basement of the smell. The odor will tend to seep into the porous concrete floors and walls of the basement, however, and these must be cleaned as well. After removing moldy or mildewed items and cleaning everything thoroughly, a water-proof sealer should be applied to all walls and floors of the basement. Be sure that all corner joints and any cracks are well sealed.