Served as an agent for the Comintern and the GRV. Worked with Richard Sorge for a period of time and was believed to have been his lover. Has a vast network of useful contacts and introduced many of them to Sorge to use in his spy ring including Ozaki Hozumi and Ruth Kuczynski. Also introduced Sorge to radio operator Max Klaussen. Continued on as a war correspondent, chronicling activities in the Chinese revolution and served for a time in 1937 in the Eighth Route Army in the field.

During World War II served as an advisor to Joseph Stillwell, the U.S. General and Military advisor to Chinese strongman Chiang Kai-Sheck, a noted anti-Communist. Persuaded Stillwell to arm Chinese Communist, convincing him that it was the lesser of two evils to help them fight against Japan.

Returned to the United States where she wrote and lectured about China and the Chinese people. Aurthored a book, "Battle Hymn of China," detailing her war experiences. Fell under FBI surveillance. Was labeled a Soviet agent after statements by Sorge were released which identified her as a Communist collaborator and a chief figure in his ability to conduct his operations. Was defended by several high ranking Washington politicians.

Threatened to sue U.S. General Douglas MacArthur libel for releasing Sorge's statements. MacArthur's chief intelligence officer Major General Charles Willoughby dared her to sue, claiming he had more than enough information to prove the allegations correct and threatened to publicly expose her. Smedley moved to England and was due to be called by the U.S. House Un American Activities committee.

Died of acute circulatory failure on 6th May 5, 1950 in a London nursing home and was buried in China.