Smith was born in London, England, and educated at Charterhouse School and St John's College, Cambridge. He settled in South Africa to prospect for gold in 1888-89. While there he developed pneumonia and was wrongly pronounced dead by doctors. He married Isabella Wood in 1896.
As a cricketer, Smith was primarily a right arm fast bowler, though he was also a useful right-hand lower-order batsman and a good slip fielder. His oddly curved bowling run-up, which started from deep mid-off, earned him the nickname "Round the Corner Smith." When he bowled round the wicket his approach was concealed from the batsman by the umpire until he emerged, leading W.G. Grace to comment "it is rather startling when he suddenly appears at the bowling crease." He played forCambridge University 1882-85 and for Sussex at various times between 1882 and 1892. While in South Africa he captained theJohannesburg English XI. He captained England to victory in his only Test match, against South Africa at Port Elizabeth in 1888-89, taking five wickets for nineteen runs in the first innings. In 1932, he founded the Hollywood Cricket Club and created a pitch with imported English grass. He attracted fellow expatriots such as David Niven, Laurence Olivier, Nigel Bruce (who served as captain), Leslie Howard and Boris Karloff to the club as well as local American players.
Smith's stereotypical Englishness spawned several amusing anecdotes: while fielding at slip for the Hollywood Club, he dropped a difficult catch and ordered his English butler to fetch his spectacles; they were brought on to the field on a silver platter. The next ball looped gently to slip, to present the kind of catch that "a child would take at midnight with no moon." Smith dropped it and, snatching off his lenses, commented, "Damned fool brought my reading glasses." Decades after his cricket career had ended, when he had long been a famous face in films, Smith was spotted in the pavilion on a visit to Lord's. "That man over there seems familiar," remarked one member to another. "Yes," said the second, seemingly oblivious to his Hollywood fame, "Chap called Smith. Used to play for Sussex."
Smith began acting on the London stage in 1895. His first major role was in The Prisoner of Zenda the following year, playing the dual lead roles of king and look-alike. Forty-one years later, he appeared in the most acclaimed film version of the novel, this time as the wise old advisor. When Douglas Fairbanks, Jr. asked him whether it might damage his career as a romantic lead to play the villain Rupert of Hentzau, he answered "Young man, I have played every part in The Prisoner of Zenda except Lady Flavia, and I can assure you that nobody ever damaged his career by playing Rupert of Hentzau". He made his Broadway debut in a revival of George Bernard Shaw's Pygmalion in the starring role of Henry Higgins.
Smith appeared in early films for the nascent British film industry, starring in The Bump in 1920 (written by A.A. Milne for the company Minerva Films, which was founded in 1920 by the actor Leslie Howard and his friend and story editor Adrian Brunel). Smith later went to Hollywood where he had a successful career as a character actor playing either officer or gentleman roles. He was also regarded as being the unofficial leader of the British film industry colony in Hollywood, which Sheridan Morley characterised as the Hollywood Raj, a select group of British actors who were seen to be colonising the capital of the film business in the 1930s. Other film stars considered to be "members" of this select group were David Niven (whom Smith treated like a son), Ronald Colman, Rex Harrison, Robert Coote, Nigel Bruce (whose daughter's wedding he had attended as best man), Leslie Howard (whom Smith had known since working with him on early films in London) and Patric Knowles.
Smith became infamous for expecting his fellow countrymen to report for regular duty at his Hollywood Cricket Club, and anyone who refused was known to "incur his displeasure". Fiercely patriotic, Smith became openly critical of the British actors of enlistment age who did not return to fight after the outbreak of World War II in 1939. Smith loved playing on his status as Hollywood's "Englishman in Residence". His bushy eyebrows, beady eyes, handlebar moustache and height of 6'4" made him one of the most recognisable faces in Hollywood. He starred alongside such screen legends as leading ladies Greta Garbo, Elizabeth Taylor, Vivien Leigh and actors Clark Gable, Laurence Olivier, Ronald Colman,Maurice Chevalier and Gary Cooper. His films include such classics as The Prisoner of Zenda (1937) mentioned above, The Four Feathers (1939), Dr. Jekyll and Mr. Hyde (1941), and And Then There Were None (1945) in which he played General Mandrake.
Commander McBragg in the TV cartoon Tennessee Tuxedo and His Tales is a parody of him. The cartoon character also appears in The Simpsons episode "The Seemingly Never-Ending Story".
Smith died from pneumonia in Beverly Hills in 1948, aged 85. His body was cremated and nine months later, in accordance with his wishes, his ashes were returned to England and interred in his mother's grave at St Leonard's churchyard in Hove, Sussex.
Smith has a star on the Hollywood Walk of Fame
In 1933, he was on the first board of the Screen Actors Guild.
He was appointed a Commander of the Order of the British Empire (CBE) in 1938, and knighted by King George VI in 1944 for services to Anglo-American amity.