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Raised in Palm Beach, Florida, Smith attended Dana Hall School, Pine Manor College and Sarah Lawrence College, the former where she studied genetics and theatre. As a college senior in New York City, she performed both in many off Broadway and Broadway productions, including The Heidi Chronicles.

Smith began her on-screen career in the genre of daytime drama, starring in the role of Kit McCormick on The Doctors (1982), and one year later, taking over the role of Margo Montgomery Hughes on As the World Turns, a role she would play from 1983 to 1990.

After taking maternity leave from acting after the birth to her son, Philip (b. 1988), Smith returned to daytime, originating the role of Llanview District Attorney Nora Hanen on ABC`s One Life to Live (OLTL), a character she has played since 1992. Almost immediately after her debut, Smith, in the role of Nora, became a centerpiece of the show, particularly for her involvement in the OLTL multiple-Emmy Award winning Marty Saybrooke rape trial storyline.