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Smith has made 113 appearances for Bournemouth since his arrival from Tottenham in 2014.
The 26-year-old right-back played a key role as Eddie Howe’s side consolidated their place in the top-flight over the last two seasons.
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“I’m delighted. I’m settled in the area and get along really well with the lads,” Smith said.
“There is nowhere else I want to be at this moment. Everything is going well for me both on and off the pitch and I’m looking forward to that continuing.”
Howe added: “When we first brought Adam to the club we believed he had huge potential. Adam has taken his opportunity, improved as a player and is an important member of our squad.
“We’re delighted he will stay with us and hopefully continue his progression further.”
