The Aussie captain came to the crease at a critical point for his side after the loss of four early wickets and finished the day 64 not out.
He had great support from Shaun Marsh, who finished the day 44 not out as the hosts will be looking to get up and beyond England's first innings score of 302.
Malan and Ali got the visitors off to the perfect start in the morning
The second day at the Gabba started with the visitors resuming their first innings of 196-4 with Dawid Malan 28 not out and Moeen Ali 13 not out.
The pair started the morning session brilliantly as the pair took their partnership past the 50 mark as well as Malan moving his own personal score past the 50 mark.
Malan's dismissal sparked a massive collapse for the visitors as they made it to 302
With the partnership on 83 though, the hosts finally got a much-needed breakthrough as Mitchell Starc removed Malan for 56.
The fall of that wicket sparked a remarkable collapse for the visitors as Ali fell soon after for 38 off the bowling of Nathan Lyon.
Lyon then removed Chris Woakes in his next over for a duck as the hosts lost three wickets for four runs.
After a brief period of calmness, the Aussies got another wicket when Pat Cummins removed Jonny Bairstow for nine to leave the score on 270-8.
Jake Ball and Stuart Broad counter-attacked after that to get the England score past the 300 mark but Starc removed Ball for 14 and Josh Hazlewood removed Broad for 20 as the visitors finished their first innings on 302 as the morning session ended.
The visitors took four early wickets after lunch to leave the hosts reeling
After lunch, the Aussies began their reply but it didn't get off to a good start as Cameron Bancroft, on debut, was removed by Broad for five.
Just as Usman Khawaja and David Warner looked like they were going to build a strong partnership after the fall of the first wicket, Ali had Khawaja trapped lbw for 11.
Warner though was still at the crease and was looking good until Ball removed the left hander for 26 much to joy of the visitors.
The fall of the third wicket brought Peter Handscomb and Smith to the crease together and the pairsaw the hosts get through to tea without losing anymore wickets.
Smith finished the afternoon session 19 not out and Handscomb finished on 14 not out as the Aussies finished the session 76-3.
Smith and Marsh's battling partnership led the Aussies fightback in the final session of the day
After tea, though, the partnership was broken in the first over as James Anderson removed Handscomb for 14 after a successful review for lbw.
That would turn out to be the final wicket of the day though as alongside Smith, Marsh showed his class as the pair took their partnership passed the 50 mark.
During the unbroken partnership of 89 Smith also passed his own 50, setting down a marker for the rest of series as the hosts finished the day on 165-4, 137 runs behind England with Smith 64 not out and Marsh 44 not out.