With family, including his mother and sister who Smith hadn't seen in more than two years, and his best mate following every shot from behind the ropes, he needed nerves of steel after making a last-hole error having almost iced the tournament after a stunning wedge to the famous island green on the 17th hole.
Smith, who had to play 26 holes on the final day, rolled in the birdie putt, his 10th for the round, which matched the record for TPC Sawgrass, to give him a three-shot buffer as he headed to the 18th hole.
But having twice put his tee shot in the water on the closing hole in earlier rounds, Smith again missed the fairway, but this time well right, a long way from the wet stuff.
His punch out from the trees rolled all the way across the fairway and found the water where two of his balls already lived.
As Smith found water on 18, Lahiri made a crunch birdie on 17 playing behind him to narrow the gap to two shots.
But Smith met the challenge, with a wedge to 1m and a tap-in bogey that demanded Lahiri made a birdie to force a playoff.
Lahiri missed the green with his approach, couldn't chip in for birdie, and the $4.9m winner's cheque belonged to Smith, who finished at 13-under after a closing round of 66, with his 101 putts for the tournament the fewest ever for a champion.
Smith was emotional about the presence of his family who saw him plant a flag ahead of another tilt at the Masters next month.
"I haven't seen them in two years. It's really cool to have them here," he said, choked up.
"My main priority was to hang out with them and golf was second for the last few weeks. It was good to see them and nice to get a win for them."
Smith completed his third round and was behind Lahiri but hammered home four straight birdies to start his final round before three bogeys halted his charge.
But the 28-year-old got on a back-nine roll, nailing four straight birdies that propelled him to a two-shot lead on the back of a red-hot putter. Smith had 11 one-putt greens through 15 holes that legendary commentator Jim Nantz called "otherworldly".
Leading by two shots, Smith was nerveless in making a huge par save on the 14th and another on the 15th after his tee shot rebounded off a young spectator, who was unhurt.
Smith gave him an autographed hat and glove for his trouble and his next tee shot was even worse as he hit a "duck hook" on 16 that went short and left into the trees.
He took a long time to work out his next move before chipping between two pine trees and out to the middle of the fairway. He then played a special shot that allowed him to walk off with par and keep the two-shot gap.
Then instead of playing it safe on the 17th, after watching playing partner Sam Burns go in the water, Smith went at the flag and hit the best shot into the famous green of the final round.
Despite the 18th-hole tension, Smith became the fifth Australian to win The Players, joining Steve Elkington (twice), Greg Norman, Adam Scott and Jason Day on the winners list.
