Smith was born April 26, 1932, in Blackpool, Lancashire, England. He immigrated to Canada in 1956 and became a Canadian citizen in 1963. Smith married Helen Wood Christie on August 6, 1960, on Vancouver Island, BC, Canada. The couple had three children (Tom, Ian and Wendy) and three grandchildren, but separated in 1983. In his later years, Smith lived with his partner Elizabeth Raines in Vancouver until his death on October 4, 2000.

Smith first attended St. Nicholas Church of England School, a state-run elementary school. At the time, few children from state schools in England went on to further academic education, however Smith did well in the eleven plus exam, and was an exception. A scholarship enabled him to attend the Arnold School for Boys. A further scholarship allowed him to study Chemistry at the University of Manchester, where he pursued his interest in industrial chemistry and was awarded a BSc followed by a PhD in 1956 for research into the stereochemistry of diols.

Smith's research career began with a post-doctoral fellowship at the British Columbia Research Council under the supervision of Khorana, who was developing new techniques of synthesizing nucleotides. The application of principles of physics and chemistry to living organisms was new at that time; DNA had been identified as the genetic material of a cell, and Khorana and others were investigating how DNA encoded the proteins that constituted an organism. In 1960, when Khorana was offered and accepted a university position with excellent laboratory facilities in the Institute for Enzyme Research at the University of Wisconsin–Madison, Smith moved with him.

Concurrently with conducting research for FRB, Smith held the positions of associate professor at the University of British Columbia's (UBC) Department of Biochemistry and honorary professor in the Department of Zoology. In 1966, Smith was appointed a research associate of the Medical Research Council of Canada, working within UBC's Department of Biochemistry.

In the late 1970s, Smith concentrated on projects in molecular biology and how the genes within the DNA molecule act as reservoirs and transmitters of biological information. In 1978, Smith, in collaboration with former Fred Sanger lab sabbatical colleague Clyde A. Hutchison III, introduced a new technique known as "oligonucleotide-directed site-directed mutagenesis" into molecular biology, resolving the Problem of how to efficiently determine the effect of a single mutant gene. They developed a synthetic DNA technique for introducing site-specific mutations into genes. This permitted comparison of different protein molecules, revealing the role of the initial mutation.

Smith and his team began to investigate possibility of the creation of mutations of any site within a viral genome. If possible, this process could be an efficient method to Engineer heritable changes in genes. Finally, in 1977 they confirmed Smith's theory.

The team's paper describing site-directed mutagenesis was published as "Mutagenesis at a Specific Position in a DNA Sequence" in the Journal of Biological Chemistry in 1978. For the team's work in developing oligonucleotide-directed site-directed mutagenesis, Smith shared the 1993 Nobel Prize in Chemistry with Kary Mullis, the Inventor of polymerase chain reaction.

Throughout the 1980s, Smith and his colleagues at the Canadian Institute for Advanced Research advocated for the establishment of a facility that would enable Canada to play a part in what had become known as the Human Genome Project. Eventually, funding was secured from the BC Cancer Agency and in 1999 the Genome Sequence Centre was established with a mandate to develop and deploy genomics technologies in support of the life sciences, and in particular cancer research. The Genome Sciences Centre also provided Technology to Genome Canada and Genome BC projects in the areas of human health, the environment, forestry, agriculture, and aquaculture.

In 1981 Smith ventured into the Business world as a pharmaceutical Entrepreneur. In collaboration with Professors Earl W. Davie and Benjamin D. Hall of the University of Washington founded ZymoGenetics in Seattle, Washington, US. The company began working on recombinant proteins in an international initiative with Novo Nordisk of Denmark. Recombinant DNA is used mostly in basic research. ZymoGenetics was acquired by Bristol-Myers Squibb. Further applications of recombinant DNA are found in human and veterinary Medicine, in agriculture, and in bioengineering.

In 1987, the Biotechnology Laboratory, one of three provincial "Centres of Excellence" was established at UBC. The new facility subsumed the Centre for Molecular Genetics, and Smith became its Director. He played an important role in drawing together Scientists, and in writing the proposal for what would become the "Protein Engineering Network of Centres of Excellence" or PENCE.

Smith received many awards in addition to the Nobel Prize, and was known for his generosity. He donated half of the Nobel Prize money to researchers working on the genetics of schizophrenia. The other half he gave to BC Science World and to the Society for Canadian Women in Science and Technology. He received the Royal Bank Award in 1999, and donated the companion grant to the BC Cancer Foundation.