Smith played character parts in films before making the transition to feature directing with "The Tall Guy" (1989), a pleasantly quirky comedy starring Jeff Goldblum and Emma Thompson and featured old colleague Atkinson in a memorable supporting role. Smith has also distinguished himself as a comic advertising director, his spots for Carling Black Label received a Silver Lion at Cannes. American fans of English comedy may have first encountered Smith as the co-star and co-screenwriter (both with Rhys-Jones) of the uneven but often hilarious British feature "Morons From Outer Space" (1985) about alien tourists (with English accents) who find themselves on Earth. He received wider exposure in the small role of the Albino in Rob Reiner's "The Princess Bride" (1987).
Smith returned to American screens for the little-seen old-fashioned comedy "Brain Donors" (1992), playing the Chico Marx figure. He remained behind the camera as the helmer of "Radioland Murders" (1994), a meticulously designed period comedy produced by George Lucas that made barely a peep at the box office. In 1996, he returned to the big screen as Sir Toby Belch in Trevor Nunn's staid filming of Shakespeare's "Twelfth Night".