Walter Smith III was born on September 24, 1980, in Houston, Texas. His father taught elementary-school music, he started on saxophone at seven, and his first paid gig was at a McDonald's. At Houston's High School for the Performing and Visual Arts, the same school that produced Jason Moran, Eric Harland and Robert Glasper, he won a Clifford Brown/Stan Getz Fellowship from the International Association for Jazz Education and the National Foundation for Advancement in the Arts, an NFAA Young Talent Award, and a United States Presidential Scholar in the Arts medal, along with a full-tuition scholarship to Berklee College of Music. The drummer Kendrick Scott was a schoolmate there. After taking his undergraduate degree in music education at Berklee, he did graduate study at the Thelonious Monk Institute of Jazz (since renamed the Herbie Hancock Institute of Jazz) and earned a master's degree in jazz studies from the Manhattan School of Music, which Berklee's faculty biography dates to 2005.

His first album as a leader, Casually Introducing, came out on Fresh Sound New Talent in March 2006 with a band of Ambrose Akinmusire on trumpet, Aaron Parks and Robert Glasper on keyboards, Lionel Loueke on guitar, bassists Reuben Rogers and Vicente Archer, and drummers Eric Harland and Kendrick Scott. In the same years he was recording as a sideman with the trumpeter Chief Xian aTunde Adjuah (then billed as Christian Scott) on Rewind That (2006), Anthem (2007) and Live at Newport (2008), with Akinmusire on his debut Prelude... to Cora (2008), with Terence Blanchard's group on Choices (2009), and with Eric Harland's Voyager band on Voyager: Live by Night (2010). His own Live in Paris (Space Time, 2009) paired him with Akinmusire, the pianist Aaron Goldberg, the bassist Matt Brewer and the drummer Marcus Gilmore; Bronze (Fresh Sound New Talent, 2009) was co-billed with the saxophonist Mark Small; and III (Criss Cross Jazz, 2010) added Jason Moran and the bassist Joe Sanders alongside Akinmusire and Harland, with Smith writing seven of its nine tunes. He also appeared on Mose Allison's The Way of the World (2010) and on Akinmusire's Blue Note debut, When the Heart Emerges Glistening (2011).

He has worked in several touring bands, among them Ambrose Akinmusire's quintet, Eric Harland's Voyager, Christian McBride's Situation, the Sean Jones Quintet and the Roy Haynes Fountain of Youth Band, according to Indiana University and Berklee. He released Still Casual on his own in 2014, with Akinmusire, the pianist Taylor Eigsti, the guitarist Matthew Stevens, the bassist Harish Raghavan and Scott. Indiana University announced on May 31, 2016, that he would join its jazz faculty as an associate professor effective August 1, 2016, and Berklee named him chair of its Woodwind Department in April 2019, to start on May 1. As of November 2026, Berklee's faculty page still lists him as chair and gives Boston as his home. The 2018 chordless trio album Twio (Whirlwind) used Raghavan and Eric Harland with Christian McBride and Joshua Redman as guests, and in 2018, 2020 and 2022 he co-led the three In Common albums with Stevens, each built around a new rhythm section: Joel Ross, Raghavan and Marcus Gilmore in 2018; the pianist Micah Thomas, Linda Oh and the drummer Nate Smith in 2020; and Kris Davis, Dave Holland and Terri Lyne Carrington in 2022. He also recorded a trio album with Bill Stewart and Larry Grenadier, Band Menu (2018), and was the tenor saxophonist in Gerald Clayton's quintet for a spring 2019 week at the Village Vanguard that became Happening: Live at the Village Vanguard (2020).

His Blue Note debut, Return to Casual, was released on April 7, 2023, and reconvened the Still Casual band of Eigsti, Stevens, Raghavan and Scott, with Akinmusire as a guest; its one cover is Kate Bush's "Mother Stands for Comfort." Earlier that year Blue Note issued Corridors, a pianoless trio album billed to Kendrick Scott, Reuben Rogers and Smith. Three of Us Are From Houston and Reuben Is Not (September 27, 2024) is a Houston-themed quartet album with Jason Moran, Eric Harland and Rogers, who was born in Saint Thomas, in the U.S. Virgin Islands, and is the title's one non-Houstonian. His third Blue Note album, Twio, Vol. 2 (March 6, 2026), brings back the chordless trio with Joe Sanders on bass and Scott on drums, adds Ron Carter on bass for half of its ten tracks, and features Branford Marsalis on two. Berklee's biography counts more than 100 recordings.

Smith plays tenor saxophone with a light, airy tone. The Guardian's review of Return to Casual heard a player of his own time who draws on tradition while working through the dense structures of post-bop, and a Chicago Jazz review compared his sound on "Contra" to a modern Dexter Gordon and noted that he plays as part of the ensemble rather than constantly out in front. He writes most of the music on his own albums, and the In Common records with Matthew Stevens are built from tightly composed short pieces for a quintet. The chordless Twio albums strip the format down to saxophone, bass and drums and lean on standards and jazz repertoire: Twio, Vol. 2 includes Thelonious Monk's "Light Blue," Wayne Shorter's "Fall," Carla Bley's "Lawns," two tunes from Joe Henderson's Blue Note records ("Isfahan" and "Escapade," the latter by Kenny Dorham), and "Swingin' at the Haven," a tune from Ellis Marsalis. Smith has said that Blue Note's catalog, including Henderson's Page One, was a large part of why he wanted to record for the label. Blue Note describes him as part of a circle of composer-improvisers that includes Ambrose Akinmusire, Jason Moran and Matthew Stevens, and he teaches at Berklee alongside Terri Lyne Carrington.