On July 11, 2013, Smith re-signed with the Knicks. He missed the first five games of the 2013–14 season for violating the NBA's anti-drug policy. On March 26, he hit nine 3-pointers against the Sacramento Kings, tying the Knicks' franchise record. On April 4, he scored a season-high 32 points with eight 3-pointers in a 90–89 loss to the Washington Wizards. Two days later, in a 102–91 loss to the Miami Heat, Smith broke an NBA record of 21 three-pointers taken in a single game, a mark set in 2005 by Damon Stoudamire. Smith hit 10 of 22 3-point shots against the Heat, setting a franchise record for 3-pointers made and finishing with 32 points for the second straight game.