Smith finished off the match with two consecutive sixes in the final over and remained not out on 84 from 54 balls as Pune chased down the target of 185 with one ball to spare as the match went down the wire.
Former India captain Mahendra Singh Dhoni's inability to finish off matches put pressure on the home side and Smith, at the other end, pulled of a sensational innings at the same ground where he had smashed a century to set up a memorable win for Australia in the recent Test series.
India batsman Ajinkya Rahane also made a significant contribution as he hit a brilliant 60 from 34 balls with the help of six fours and three sixes.
Smith and Rahane stitched 58 runs for the second wicket from seven overs to lay the foundation for the run chase.
The other opener Ajinkya Rahane and captain Steven Smith batted sensibly with a mix of caution and aggression to take Pune to 93 for 1 at the halfway mark.
Rahane reached to his 32nd T20 fifty with a four off Hardik Pandya in the ninth over but he fell two overs later while attempting a pull shot with Nitish Rana taking a smart catch at deep square leg.
Rahane hit six boundaries and three sixes in his 34-ball knock and shared 58 runs for the second wicket with Smith.
Smith was dropped on 36 off the bowling of McClenaghan with Nitish Rana being the culprit.
Mumbai raised some hopes of a win after Hardik Pandya dismissed Ben Stokes, this IPL season's costliest buy, for 21. But it was shortlived as Smith snatched the game from the jaws of defeat.
Earlier, Hardik Pandya's late heroics took Mumbai Indians to 184 for 8 after leg-spinner Imran Tahir produced a sensational three-wicket burst in the space of 10 balls.
Mumbai did not have any substantial partnership after the opening wicket stand of 45 between Parthiv Patel (19) and Jos Buttler (38) before Pandya's late flourish took them to a competitive total. Pandya remained not out at 35 from 15 balls (1x4; 4x6) as Mumbai added 64 runs in the last five overs.
Tahir cleaned up Patel in his second ball of the match, giving Pune the first breakthrough after Mumbai had knocked off 41 runs in the first four overs. He dealt a body blow to Mumbai in his next over by sending back captain Rohit Sharma (3 off 7 balls) who tried to work Tahir's delivery to the leg side without any foot movement only to lose his stumps.
Butler had hit his England team-mate and this season's costliest buy Ben Stokes (1/36) for two consecutive sixes to set the tempo of the match.
Rajat Bhatia (2/14) had Ambati Rayudu caught and bowled for 10 before Mumbai reached 100-run mark in 13th over. Bhatia then cut short Krunal Pandya's (3) stay at the crease to just five balls to reduce Mumbai to 107 for five in the 14th over.
Hardik Pandya then stunned the home crowd as he scored four sixes and a boundary to take 30 runs from the final over bowled by Ashok Dinda.
Disclaimer: No Business Standard Journalist was involved in creation of this content
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