But it was Smith who came out on top when he took a superb diving catch to dismiss Pietersen at mid-off for just three runs.
The day was to get even better for Smith as his team dismissed England for a paltry 154 before he smashed an unbeaten 89 in just 58 balls as South Africa dumped England out of the tournament in a crushing nine-wicket win.
Pietersen's first match in two years against the country of his birth had been billed as a needle clash.
Unfortunately for the supporters, the show lasted just four overs as Smith dived forward to bring off a stunning low catch off the bowling of Andre Nel to account for the 26-year-old Pietersen, the world's top batsman.
It was the catch Smith did not want to drop and South Africa celebrated as if they had taken more than just a wicket.
Pietersen arrived in the middle to thunderous applause from England fans, but soon felt the heat, being greeted by a bouncer from fast bowler Nel early in his innings.
The next delivery struck him on the body, with Nel staring hard at the batsman. Pietersen opened his account with a single and then changed his bat.
But it was to no avail as he soon became Nel's second victim.
Pietersen and Smith's stormy relationship has been simmering along since England's tour of South Africa in 2005 when Pietersen plundered 454 runs with three centuries on his first return to his homeland since his controversial exit.
That the England batsman received a hostile reception was no surprise after he decided to switch allegiance in protest at the quota system in South Africa. He was called an opportunist with Smith saying he did not like the England batsman.
"I'm patriotic about my country, and that's why I don't like Kevin Pietersen - the only reason that Kevin and I have never had a relationship is because he slated South Africa," Smith said.
In turn, the England batsman described Smith as a "muppet" and added: "I don't talk to Smith. It's a waste of breath because I don't have any respect for him."
Smith may not like Pietersen, but has admitted he respects him as a player.
"He is one of the best one-day players at the moment. He's a vital cog in their setup and we have respect for his cricketing ability," said the South African skipper.
Pietersen tried to diffuse a potential explosive situation on the eve of the match, saying Tuesday's game was more than just about the two individuals.
"I think everyone knows we don't get on, but that's gone. It's going to be a big game with a lot of needle," he said.