DANGER: Mold is definitely harmful if you breathe it in; even in small quantities. (Some mold is deadly!) Wear a mask and handle it with plastic gloves. Protective eyewear may also be called for.
So you have a moldy, smelly book. First figure out if the book is wet or damp at all. If it is damp then mold is still growing. Stop the mold from growing by drying out the book. This will not kill the mold. It will just help it go dormant. In fact it will always be dormant. It is impossible to get rid of all the mold spores. All you can do is keep the book in a safe environment away from your other books and keep the temperature and humidity at safe levels. Around 68 degrees Fahrenheit temperature with relative humidity below 50%. Fluctuations should be minimized. For more information on caring for your books got to www.SaveYourBooks.com.
This might be a good time to think about the value of the book. If you can replace your book with a clean copy relatively inexpensively then do that! Keeping a moldy book near your other books is like strapping them to a time bomb. Air circulation is key in preventing mold from starting to grow.
If your book is still wet, you can prop it up and blow a fan towards it (but not towards you). When it is nearly dry you can place paper towels between pages and start to gently press the book. Do this very lightly at first. Placing paper towels between pages and pressing hard will strain and break the spine. As it dries you can remove more and more of the paper towels and press harder and harder. When all the paper towels are out of the book and it is completely dry, then align it as best you can and leave it under weight overnight.
Now that it is dry you can work on the mold. Know that any discoloration that has taken place is permanent. You can use 70% isopropyl alcohol to wipe the surfaces of the book and even the pages. Throw away all the wipes when you are done.
If it is a leather book you can use the special book wax SC6000 to help seal the pores of the leather. This will help keep the mold spores away from moisture. That is what was done to the moldy book in the photo above.
Once the mold is taken care of you can work on removing the smell. Enclose the book in a container with a bag of Smelleze® Reusable Book Smell Eliminator Deodorizer Pouch. Be sure to check it every day to make sure the mold is not returning and that the smell is improving. Consider running a humidifier in the room at the same time.
