Smith was one of 105 settlers who sailed from England on December 19, 1606, and landed in Virginia on April 26, 1607. When they reached North America, the group opened sealed instructions and found that Smith was chosen as one of the seven leaders of the new colony. This was controversial since Smith had been accused of mutiny on the voyage.

The settlers established Jamestown on May 24, 1607; it became the first permanent English settlement in North America. Jamestown was located on an island in the James River in what is now Virginia. Smith was the colony's leader and also led hunting and exploration expeditions around the area. He traveled as far as what is now Richmond, Virginia (1607). On another trip later that year, Smith was taken captive by the Chief of the Powhatan Indians and was condemned to death. Pocahontas (1595-1617), daughter of the Indian chief, saved Smith's life. (Pocahontas eventually married the English settler John Rolfe and later died of smallpox.)

By the end of the first year, most of the settlers had died of starvation or disease. After that disastrous first year, Smith imposed order by forcing everyone to work.

In 1608, Smith led a small expedition exploring the Chesapeake Bay area (as far north as Baltimore). On their return trip, they also went up the Potomac River (up to Washington, D.C.). Smith almost died while returning to Jamestown; he caught a stingray that stung him and almost killed him. That area of the Rapahannock River is still called Stingray Point. After returning to Jamestown, he set out again to explore more of Chesapeake Bay, mapping much of the area.

More settlers arrived at the Jamestown colony in August, 1609. There was no agreement on who should be in charge of the colony. Smith was injured in a gunpowder explosion in September, 1609, and left for England in October, 1609. Smith sailed to America again in 1614, traveling to what he called New England, the area from Maine and Massachusetts. He returned to England with furs (but he never returned to Virginia).