Smith was born in Epworth, Lincolnshire, the daughter of Colin and Marilyn Smith, who performed as a Country and Western duo called The Daltons. She studied dance at the Joyce Mason School of Dancing from an early age. She later attended South Axholme Community School, where she received an A* in performing arts at GCSE. Though she never trained at a drama school, Smith was a member of the National Youth Music Theatre from 1995–2001, performing a number of lead roles in productions such as Bugsy Malone and Into the Woods. She then completed further education at John Leggott College in Scunthorpe, Lincolnshire. Her great-great-grandfather, Benjamin Doubleday, was a respected and well-known banjo player in Yorkshire and later played as a trio with his daughters, May and Harriet, in The Darrell Trio.
From 1999 to 2000, Smith played Emma in The Royle Family. She played Janet in the long-running series Two Pints of Lager and a Packet of Crisps from 2001 until her departure from the show in 2009. In 2004, she made a one-episode appearance in Mile High as Suzy, an airport cleaner who was so desperate to become cabin crew, she impersonated a flight attendant. She also featured in The Comic Strip's 2005 episode "Sex Actually" as Angie.
Smith played Cleo Martin in Love Soup (2005) and starred as Michelle, a hypocritical nutritionist, in three series of the sitcom Grownups (2006–2009). She has also appeared on The Lenny Henry Show as M.E. Westmocott, a role spoofing the various medical examiners on CSI. In the 2009 Two Pints of LagerComic Relief special, which crossed over with Grownups, she played her characters from both series.
In 2015 she starred as cancer patient Lisa Lynch in the one-off BBC drama The C Word and narrated the reality series Mission Survive, presented by Bear Grylls. She will also star as policewoman Jo Gillespie in the upcoming ITV drama Black Work.
As well as her role in Legally Blonde, Smith also performed the title role in the workshop productions of a new musical adaptation of Bridget Jones' Diary. On 5 April 2012, it was announced that Smith had decided to pull out of the musical, and would no longer be playing the title role, delaying the production of the show. From September to November 2012, Smith played the title role in Hedda Gabler at the Old Vic, winning the 2013 Theatregoers' Choice Award for Best Actress in a Play. Shortly before collecting her award at the ceremony on 17 February 2013, Smith performed the original song Stagey And Proud, which was written by Chris Passey and Amy Carroll.
Smith played companion Lucie Miller alongside Paul McGann's Eighth Doctor in a radio series of Doctor Who, produced by Big Finish and transmitted on BBC 7 from New Year's Eve 2006; the plays returned in a second series released on CD and scheduled for BBC 7 broadcast. A third series of adventures for Lucie and the Doctor aired in March 2009, as weekly half-hour downloads followed by a Christmas Special. Lucie Miller made her final appearances in the fourth series, ending in 2011. Smith also appeared as Ruby Ruggles in the 2008 radio serial The Way We Live Right Now, and took over the role of Tamsin Trelawny in series 2 of Elephants to Catch Eels on BBC Radio 4.
Smith was once in a relationship with James Corden, which ended in June 2009. In an interview in March 2010, she revealed that she and Scottish actor Ross McCall had begun dating after a 10-year friendship. However, in August the same year, she stated that they had separated due to the pressure of a long-distance relationship.