Lane Smith was born in Memphis, Tennessee in 1936. He graduated from The Leelanau School, a boarding school in Glen Arbor, Michigan where he is enshrined in the school's Hall of Fame, and spent one year boarding at The Hill School in Pottstown, Pennsylvania before going off to study at the Actors Studio in the late 1950s and early 1960s along with Dustin Hoffman and Al Pacino.

After his graduation, he found steady work in New York theater before making his film debut in Maidstone in 1970. During the 1970s, he regularly made appearances in small film roles including Rooster Cogburn in 1975 and Network in 1976. He also acted on television, notably playing a U.S. Marine in Vietnam in the made for television miniseries A Rumor of War.

He made a major breakthrough in 1984 with significant roles in Red Dawn, Places in the Heart and the television series V. In 1989, Smith gained great recognition for his portrayal of former President Richard Nixon in the docudrama The Final Days. Newsweek praised Smith's role by stating, "is such a good Nixon that his despair and sorrow at his predicament become simply overwhelming." Smith later earned a Golden Globe nomination for his performance. He also appeared in the original Broadway stage production of David Mamet's Glengarry Glen Ross as James Lingk. For his role, he received a Drama Desk Award.

In 1990, he appeared in Air America playing a U.S. Senator. Two years later, he played a small-town district attorney opposite Joe Pesci in My Cousin Vinny, followed by a role as Coach Jack Reilly in The Mighty Ducks. However, it was not until 1993 that Smith landed his first major television role as Perry White in Lois & Clark: The New Adventures of Superman, for four seasons before ending in 1997. In 1998, Smith appeared in a major role as fictional television anchorman Emmett Seaborn in the HBO miniseries From The Earth to the Moon. Smith's final film appearance was in The Legend of Bagger Vance in 2000.

Smith was married twice. His first marriage was to writer Sydne MacCall. The couple had one son together: Robby Smith born on January 24, 1987. In 2000, he married to Debbie Benedict who had one son from a previous marriage.

Smith was previously in a relationship with actress Mariette Hartley.

Smith was diagnosed with amyotrophic lateral sclerosis (also known as ALS or Lou Gehrig's disease) in April 2005. He died of the disease at his home in Northridge, California on June 13, 2005. He was 69 years old.