William Smith was born in September 1756 to a Dissenting family of both London and the Isle of Wight. He attended French's Dissenting School at Ware and the Daventry Academy before joining the family's grocery business.

In 1779 after the passing of an uncle, Smith inherited his uncle's fortune. In 1781 he married Frances Coape; by that same year, he had converted to Unitarianism. The couple had 11 children, including daughter Frances (Fanny), who married W. E. Nightingale and was the mother of Florence Nightingale.

In the 1780s Smith worked for the radical Society for Constitutional Information. From 1784-1790 he was the Member of Parliament for Sudbury (a seat he bought); after losing his Sudbury seat, he bought the seat for Camelford and was MP from there from 1791 to 1796. He was again MP for Sudbury from 1796-1802. During the 1790s he joined the moderate Whigs and joined Wilbur Wilberforce in abolishing the trade of enslaved peoples.

For most of the years between 1802 and 1830, Smith was MP for Norwich. He was appointed a Royal Commissioner to supervise the building of roads and bridges in the Scottish Highlands from 1803-1813. In the 1810s and 1820s he suffered business reversals and was almost bankrupt by 1823. William Smith died in May 1835.