It is named after Thomas Smyth, a United Empire Loyalist who in 1786 was granted 1.6 square kilometres (400 acres) in what is present-day Smiths Falls.

[4][5] At the time of construction of the Rideau Canal a small settlement had been established around a mill operated by Abel Russell Ward, who had bought Smyth's land.

An article in Smith's Gazetteer in 1846 described the town as a "flourishing little village pleasantly situated on the Rideau River and on the Canal, twenty-three kilometres (14 mi) from Perth.

For a number of geographical reasons, and also due to the proximity of the Rideau Canal, the town of Smiths Falls became a major focal point for both the CPR and the CNoR.

It was near Smiths Falls that German soldier Oberleutnant Franz von Werra jumped from a POW train and escaped to the United States, eventually reaching his homeland.

[8] Von Werra was, reputedly, the only escaped Axis POW to successfully return home during the war and his story was told in the book and film entitled The One That Got Away.

[11][12] The Cataraqui Trail now follows the former CN railbed southwest from Smiths Falls, starting from a parking lot at the end of Ferrara Drive.

[17] The town is on the Rideau Canal system for recreational boating, and is served by the Smiths Falls-Montague Airport (Russ Beach) for general aviation.

It is also a major railway junction point, and its station receives regular passenger service to Ottawa and Toronto from Via Rail.

Several manufacturers were based in Smiths Falls, perhaps the best-known being the Canadian operation of The Hershey Company (opened in 1963) which closed in December 2008.

[24] Over 750 jobs have been created by Canopy Growth which has revitalized the town's economy after the departure of the Hershey factory and the closure of Rideau Regional Centre.

[25] Investment by Constellation Brands of $5B in Canopy Growth Corporation has helped further secure the positive economic potential for Smiths Falls.

[26] Canopy has purchased the site of the closed Shorewood Packaging building to construct a facility for bottling cannabis infused beverages.

Smiths Falls is also home to the Settlers organization which is a member of the Canadian Premier Junior Hockey League (CPJHL), which operates throughout Ontario and Western Quebec.

Lower Reach, located next to Rideau River, is home to baseball diamonds, soccer fields, play structures and a splash pad.

Also located in Smiths Falls was the Rideau Regional Centre, which provided a residential program for mentally challenged and disabled persons from 1951 until its closure in March 2009.