The 1992-93 team was led by George Lynch, Eric Montross, Brian Reese, Donald Williams and Derrick Phelps. The Tar Heels started out with an 8-0 record and were ranked #5 in the country when they met #6 Michigan in the semi-finals of the Rainbow Classic. The Wolverines, led by the Fab Five in their sophomore season, won 79-78 to on a last-second shot. North Carolina bounced back with nine straight wins before losing back-to-back road games against unranked Wake Forest and #5 Duke. After seven more straight wins, the Tar Heels were ranked #1 heading into the last week of the regular season (their first #1 ranking since the start of the 1987-88 season). North Carolina beat #14 Wake Forest and #6 Duke to close out the regular season and clinch the top seed in the ACC tournament. North Carolina reached the tournament final, but they lost 77-75 to Georgia Tech without Derrick Phelps who was injured. Nonetheless, North Carolina was awarded the top seed in the East Regional of the NCAA Tournament, defeating #16-seed East Carolina (85-65), #8-seed Rhode Island (112-67), #4-seed Arkansas (80-74) and #2-seed Cincinnati (75-68) to reach the final four in New Orleans.
In the national semi-finals, Smith's Tar Heels defeated his alma mater Kansas (coached by future North Carolina coach Roy Williams) 78-68, setting up a rematch with #3-ranked Michigan in the finals.
The national title game was a see-saw battle throughout, but is remembered best for Chris Webber's time out call with seconds left when Michigan didn't have any. Michigan was assessed a technical foul and North Carolina ended up winning 77-71, giving Smith his second national championship.