"Smoke" was released by Paul Kelly with Uncle Bill; the latter is a Melbourne bluegrass band comprising Gerry Hale on guitar, dobro, mandolin, fiddle, and vocals; Adam Gare on fiddle, mandolin, and vocals; Peter Somerville on banjo and vocals; and Stuart Speed on double bass. The album featured a mix of old and new Kelly songs treated in classic bluegrass fashion. "Our Sunshine", newly written, was a tribute to Ned Kelly, a famous Australian outlaw (not related). Kelly had previously recorded a Slim Dusty track with Uncle Bill, "Thanks a Lot", for the compilation "Where Joy Kills Sorrow" (1997). "Smoke" was issued on Kelly's new label, Gawdaggie, through EMI Records in October 1999, and peaked at No. 36. It won three awards from the Victorian Country Music Association: 'Best Group (Open)', 'Best Group (Victorian)', and 'Album of the Year' in 2000. In September Kelly performed at the Spiegeltent at the Edinburgh Festival, as well as shows in London and Dublin.