Utilizing the panel data of 285 prefecture and above cities between 2003 and 2018, this study investigated the effect of smart city policy on urban haze pollution in China at national, regional, and city administrative rank levels by using the difference-in-differences (DID) model and the spatial difference-in-differences (SDID) model. Results show that, in general, smart city policy reduced urban haze pollution of pilot cities. Moreover, the results confirm the presence of spatial heterogeneity in the intensity of the pollution mitigation effect at regional and city administrative rank levels. Additionally, this study identifies the spatial spillover effect of smart city policy and provides empirical evidence of the coexistence of “beggar-thy-neighbor” effect and “demonstration effect”, which indicates the difficulty of haze pollution control in the process of smart city construction and highlights the importance and necessity of top-level design and differentiated policies of smart cities. Finally, several meaningful implications and research avenues are outlined.