Six years later, he was promoted to Cabinet as conservation minister, and in following years took on on corrections, education, immigration, social welfare, and treaty negotiations portfolios.
He continued to climb the party's ranks, and was appointed deputy leader after Don Brash rolled Bill English as leader in October, 2003.
However, the time at the top was to be short-lived, and he was dumped as deputy in favour of Gerry Brownlee three weeks later after questions were raised within the caucus about his behaviour.
Just days after becoming deputy, Dr Smith took two weeks' "stress leave'' amid reports of erratic behaviour - a topic his opponents in Parliament still use against him.
The following year, Dr Smith again became the subject of controversy when he spoke out publicly about a Family Court custody case.
The High Court found him guilty of contempt of court for revealing details of the case, and also found he had tried to pressure the child's caregiver in a conversation with her and through the media.
Despite the conviction, he remained in Parliament after Speaker Jonathan Hunt ruled his actions did not fall within the statutory definition of a crime.
Dr Smith faced further legal troubles when he was sued by preservatives producer Osmose New Zealand over comments he made about a timber product in 2005. The case was eventually settled out of court in 2010, when Dr Smith apologised and made an undisclosed payment.
When National came back into power in 2008, Dr Smith regained a place in Cabinet, taking on the ACC, environment and climate change portfolios.
His appointment as environment minister followed continued interest in the area from Dr Smith, who in 1998 founded the Bluegreens - an environment-focused advisory group within National.
In his own website, Nick4Nelson, the MP described improving management of the environment and natural resources as his "greatest passion'', and said he was particularly proud of his role in introducing the amended Emissions Trading Scheme, and establishing the Energy Efficiency and Conservation Authority.
Following the National's re-election last November, Dr Smith slipped down the party's list, from six to 10, and had his ACC portfolio replaced with local government.
The ups and downs of Dr Smith's private life have also made headlines during his time in Parliament. In 2005, he separated from his wife of 20 years, with whom he had two children.
He remarried four years later, becoming a stepfather to two more children.
