His score was the highest-ever in an ODI at the Sydney Cricket Ground and made up for the rest of his team's poor form with the bat, with Travis Head the only other Aussie to make it past 50.
The captain scored a memorable 164 as the hosts set 324-8 and bowled out the Black Caps with five overs and four balls to spare.
Hesson also downplayed Australia's recent struggles, dismissing the defeats to South Africa as irrelevant.
Smith underlined his man-of-the-match qualities with two decisive catches in the Black Caps innings.
186 - Sachin Tendulkar's 186* at Hyderabad in 1999 remains the highest score by a captain against New Zealand in ODIs.
"I was disappointed that I'd done the hard work to get to fifty and to build that partnership into a 127-run partnership and not go on with it in the last 10 overs". Now ranked No.1 in the world, so I don't think the unsettled nature of the Test side will lead into the one-day side. Nice to get a big score on my home ground.
"We were able to get over the line, which was the most pleasing thing".
The in-form Kiwi opener produced a brilliant century, scoring 114 off 102 balls, but it wasn't enough to propel his side to what would have been a sensational win against Australia.
"It's important that we continue to produce good crowds but, as I said, Canberra's rated very, very highly over the last few years".
Jimmy Neesham put on 92 runs for the third stand with Guptill before he holed out to Hazlewood off Mitchell Starc in the 22nd over.
Smith's top-ranked team suffered a 5-0 ODI series drubbing in South Africa in October and earlier looked shaky again when reduced to 92 for four in the 21st over.
The Black Caps arrived without veteran batsman and former captain Ross Taylor, who needed eye surgery, fast bowlers Adam Milne and Mitchell McClenaghan, and allrounder Corey Anderson.
Colin Munro (49 off 59) tried to hold firm, while Matt Henry (27 off 15) swung his bat, but in the end, Australia had too many runs on the board. Smith dominated the recovery with a ground ODI record 164, supported by Travis Head (52) and Matthew Wade (38). BJ Watling missed a leg-side catch on 13 and one run later Boult's leg before wicket appeal was turned down by the umpire. There is a threat of rain, but as long it stays away, it should be a fine clash between an Australia side riding on momentum and a desperate New Zealand looking to stay alive.
David Warner attacked debutant paceman Lockie Ferguson, smashing two boundaries off the youngsters first over before he inside-edged on to his stumps for 24 off 29 balls.
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