Born in Texas, Smith joined American at the recommendation of a relative in the company. In business, he was known for an informal, no-nonsense leadership style that stressed close relationships with both executives and employees. Smith was said to know every American employee by name until the end of his first term as CEO. During World War II, he left the company to become a major general in the United States Air Transport Command.
He was close friends with many prominent Texan politicians, including Lyndon Johnson and Sam Rayburn. His friendship with the former was the principal reason for his accession to the Cabinet in 1968. However, he often clashed with the civil service because of his aversion to bureaucracy, and this caused him to leave his post early and enter a first retirement.
Smith returned to American in 1973 following a period of corporate mismanagement and scandal, although he retired again less than a year later, stating that he was "working in a 747 era with a DC-6 state of mind."
The American Airlines C. R. Smith Museum in Fort Worth, Texas is named after him.