The 26-year-old, ranked at nine in the world, obliterated Wellington's Rob Szabo, the New Zealand number one, in the opening match at Trusts Arena in West Auckland.
The two following games struggled to match the pace set by Smith, who flowed from the outset with a series of 180s.
The third Auckland Masters has been hit hard by the non-appearance of world number one Michael van Gerwen and inaugural winner Adrian Lewis.
But Smith went some way to compensating for that with a performance that was all class as he cruised to a 6 - 0 victory.
But Northern Ireland's world number 12 Daryl Gurney couldn't match Smith's brilliance as he accounted for Australian Rob Modra by 6 - 2.
Modra even apologised to Gurney for winning a leg. Gurney was never under threat though.
And the standards collapsed completely in the third game when fourth seed James Wade of England, the world number 10, was in terrible form in beating Stratford's Mark Cleaver 6 - 2.
Cleaver could quite easily have won the opening two legs and had many further chances to put Wade under a lot of pressure.
Wade only showed the odd flash of form, notably a 120 finish to take a 4 - 1 lead against Cleaver, who had lost heavily to Peter Wright in his previous appearance in the Auckland Masters two years ago.
Plasterer Cleaver won a poor fourth leg, and took out another one but Wade - who has been struggling to find good form - finally battled to victory, with a scoring average only in the 80s. The result means Gurney will play Wade in Saturday's quarter-finals.
Invercargill's Warren Parry was also given plenty of chances by his star opponent Raymond van Barneveld, but lacked the consistency to repeat his remarkable victory over Michael van Gerwen in Sydney three years ago.
Dutchman van Barneveld would have been nervous at two-all and Kiwi number two Parry finished with an 80 to trail by 4 - 5. But Parry collapsed in the next leg.
In a brilliant David v Goliath clash, unheralded Porirua sprinkler technician Darren Herewini, making his TV tournament debut, pushed the legendary Phil Taylor all the way before losing 4 - 6.
The 25-year-old had two darts to take a 4 - 3 lead and there seemed a genuine chance that the crowd was about to witness one of the great sporting upsets.
Taylor gave Herewini, who exhibited a lovely technique, a clap before shaking hands after the match. The young Kiwi looked like he was enjoying the experience, raising his hands for the crowd after each leg win. At the end, Taylor handed Herewini the dart board.
Aucklander Cody Harris had stacks of chances against erratic Australian Simon Whitlock, but the "Wizard" clung on for a 6 - 4 win in a poor game.
Results: Michael Smith (England) b Rob Szabo (NZ) 6 - 0; Daryl Gurney (Northern Ireland) b Rob Modra (Australia) 6 - 2; James Wade (England) b Mark Cleaver (NZ) 6 - 2; Raymond van Barneveld (Holland) b Warren Parry (NZ) 6 - 4; Phil Taylor (England) b Darren Herewini (NZ) 6 - 4; Simon Whitlock (Australia) b Cody Harris (NZ) 6 - 4; Kyle Anderson (Australia) b Gary Anderson (Scotland) 6 - 4; Corey Cadby (Australia) b Peter Wright (Scotland) 6 - 4.
Quarterfinals: Daryl Gurney v James Wade, Raymond van Barneveld v Phil Taylor, Kyle Anderson v Simon Whitlock; Michael Smith v Corey Cadby
