All five New Zealand cities had poorer readings than the 14 Australian cities included in WHO's data.
Sydney had just 12 micrograms of PM10 particles per cubic metre, while Australia's worst city was Brisbane on 18.
The WHO data put Auckland's air quality in the same league as Tokyo's and worse than New York's on 21.
Green Party transport spokesman Gareth Hughes said the air pollution reflected in the figures was a result of Aucklanders' dependency on cars and "should serve as a wake-up call to the Government which is about to pour $13 billion into new roads and motorways".
"The Government's not doing enough.
"We've got one of the oldest vehicle fleets in the world, Aucklanders are heavily car-reliant and it's no accident we've got the highest air pollution in Australasia."
But Dr Smith said the data was out of step with his Government's numbers which showed all five New Zealand main centres had PM10 readings below WHO's guidelines, including Auckland with a reading of just 16.
"I do find it odd that the WHO figures show Auckland has the worst air pollution problem in New Zealand when that is contrary to all the historic data which shows our biggest problem is in Christchurch."
Dr Smith said his Government was serious about improving air quality, with a programme to convert 20,000 homes to clean heating, and tightening fuel and vehicle emission standards.
Meanwhile, WHO estimates more than two million people die each year from inhaling tiny airborne particles present in air pollution and a recent report to the Auckland Council estimates the health costs of air pollution in urban Auckland from all sources is at least $727 million a year and results in about 730 premature deaths each year.
The report found key sources of air pollution in Auckland were domestic heating, transport and industry.
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The water quality in New Zealand's rivers and streams rates well internationally but is deteriorating, a report on local authorities' water management by Auditor-General Lyn Provost has found.
"My audit shows that we have reason to be concerned about freshwater quality in some parts of the country, particularly in lowland areas that are mainly used for farming," she said. Dr Smith welcomed Ms Provost's report, saying that it supported his Government's steps to improve water quality.
" The Government will progress its recommendations and we urge regional councils to pick up on the improvements in this report."
But Federated Farmers believed the report didn't give enough recognition to the "enormous amount of work being put in by farmers and others to improve the quality of our water", president Bruce Wills said.
