While you may be amazed at the closeness you feel with you dog and the similarity in behavior between dogs and people, dogs are still a different species with foreign behavior. Face and nose-licking is one dog behavior that leaves many people befuddled, but it makes perfect sense to dogs.
Eating and Puppies
Licking is an instinctive behavior dogs learn in puppyhood. Both wild dogs and wolves lick their parents' faces to encourage their parents to regurgitate food into their mouths. This behavior is retained in adulthood and can serve many purposes. Puppies and some adults may lick their owners' faces because they are hungry. Many dogs lick their owners' faces because they smell like food the owners have recently eaten.
Submission
Licking is a submissive behavior that dogs use to appease bigger or more dominant dogs when they are afraid, attempting to resolve a conflict or trying to demonstrate their submissiveness. Some dogs lick their owners' faces when they are fearful or in an attempt to calm an angry owner down.
Affection
Submissive gestures such as licking often get turned into affectionate gestures. Owners may also inadvertently reward licking by giving dogs lots of attention or treating the licks like kisses. The dog then learns that licking is a good behavior that will solicit affection from the owner.
Gathering Information
While humans tend to rely primarily on their eyes, dogs have much stronger noses than people. Some dogs lick to get a better smell, or lick to get more information about something they've smelled. Your dog may lick you to find out where you've been or may lick while he's smelling your face as a submissive gesture designed to encourage you to continue to allow the smelling.
