Born Peter Schmidt in New York City, Pete Smith got a job after graduating business college with The Player magazine and later with Billboard magazine. That led to his being hired as a publicist for Famous Players-Lasky and Artcraft Pictures, and he was later appointed publicity director at Paramount Pictures. Director Marshall Neilan hired Smith to be the publicist for his own production company, and Smith left New York for Hollywood. After Neilan's company closed, Smith freelanced for a short period before being hired by MGM in 1925 as the head of its publicity department, a position he held until 1930.

The job that really brought him recognition, however, was his producing, writing and narrating a series of shorts known as "Pete Smith Specialties" for MGM. The one-reelers covered just about every subject imaginable, from the animal world to the latest technology to how to handle annoying patrons in movie theaters, all delivered with Smith's trademark wry, bemused narration. Many of the later shorts were written and directed by actor Dave O'Brien, using the name David Barclay. Sixteen entries in the series were nominated for Oscars, and two of them won. The series came to an end in 1954, though there were enough made to continue releasing into 1955.

Smith's later years were plagued by bad health, and he spent more and more time being hospitalized. In 1979, with his health deteriorating rapidly, he committed suicide by jumping out of the window of his ninth-floor hospital room. He was 86 years old.