Smith had a school-record 80-yard touchdown run on the first play from scrimmage, and had 177 yards by halftime for the Knights (1-0), who led 25-3 at the break and claimed their first win over a BCS conference team in seven years.
N.C. State made it a two-point game on two fourth-quarter touchdown passes by Harrison Beck - a 6-yarder to Pat Bedics and a 14-yarder to Donald Bowens midway through the quarter.
The Wolfpack had the ball at their 20-yard line with 6 minutes left but were stopped on a fourth-and-6, allowing UCF to bleed the clock.
N.C. State (0-1) had one last chance after the Knights turned it over on downs with 55 seconds left, and Beck led the Wolfpack to the UCF 41 with about 10 seconds left.
But on the next play they were penalized for having 12 men on the field with 4.5 seconds left, and Joe Burnett intercepted Beck's desperation attempt at about the 20.
That sealed the Knights' second victory over a team from a BCS conference since their 1996 move to the Football Bowl Subdivision, and their first since shocking Alabama 40-38 in 2000 in a win that helped lead to Mike DuBose's exit in Tuscaloosa.
Smith surpassed his previous best of 202 yards, set against Nevada in the 2005 Hawaii Bowl, and became the first player with more than 200 yards rushing against N.C. State since Minnesota's Tellis Redmon had 246 in the Micron PC Bowl in 2000.
Andre Brown had a 33-yard touchdown run one play after Darrell Blackman's 57-yard punt return for the Wolfpack. Beck relieved starter Daniel Evans and completed 17-of-28 passes for 207 yards.
It wasn't enough to keep O'Brien from getting off to a tough start in Raleigh. The former Boston College coach made a rare intra-conference switch last December to replace Chuck Amato, who was fired after a 3-9 finish.
Smith burst untouched through the right side and down the sideline on the season's first snap, and the Knights intercepted Evans' pass on N.C. State's opening series to set up Michael Torres' 40-yard field goal that put UCF up 10-0 about 3 1/2 minutes into the season.
N.C. State was outgained by nearly 200 yards in the first half and had minus-14 yards rushing at the break. At one point, UCF had 140 total yards to the Wolfpack's 4.
Torres finished with three field goals, also converting from 39 and 19 yards out, and defensive end Bruce Miller recorded a safety when he sacked Evans in the end zone.
The Associated Press News Service
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