Important stabilizers (not highlighted): Erector Spinae, Rectus Abdominis, Obliques
Set the safety pins of the Smith machine to a height that would prevent an injury if you were to be unable to lift the Smith machine bar.
Set the bar of the Smith machine to just under shoulder height.
Stand under the bar, with the bar running across the back of your shoulders, and grasp it at both sides. Your feet should be shoulder-width apart and pointing slightly out to the sides.
Rotate the bar to unlatch it from the rails.
Keeping your torso upright, inhale as you squat down by simultaneously pushing your hips backward and bending your knees forward. Descend until your thighs are at least parallel with the floor.
Exhale as you stand and push the bar back up to the starting position, driving through your heels.
Repeat for the prescribed number of repetitions.
Once finished, rotate the bar to latch it back on to the rails.
Comments and tips
Keep your feet flat and your torso upright.
Keep your feet and knees pointing in the same direction.
At the bottom of the squat, make sure that your knees remain behind your toes.
The Smith machine squat will allow you to safely squat a heavy weight in the absence of a spotter. Just make sure that you use the safety pins.
Although great for allowing you to safely squat heavy weights, the Smith machine squat is not as great an exercise as is the barbell squat because the latter recruits more stabilizer muscles and helps to improve your balance.