Steve Smith scored a career-best 164 as Australia claimed a 68-run victory over New Zealand in the opening one-day international in Sydney.

Captain Smith helped dig his side out of a sizeable hole at 92 for four by blazing 14 fours and four sixes in a 157-ball knock - having been dropped on 13 by BJ Watling.

It was a let-off New Zealand were made to pay for as Smith recorded his best score in the format and the highest by any player in an ODI at the SCG, breaking AB de Villiers' 162 not out for South Africa against the West Indies last year.

Travis Head (52) and Matthew Wade (38) provided good support to Smith as Australia recovered to make 324 for eight after winning the toss.

Like Australia, New Zealand suffered a poor start to their innings as Josh Hazelwood sent back Tom Latham (two) and skipper Kane Williamson (nine) cheaply, but Martin Guptill mirrored Smith's innings in launching an impressive fightback.

The innings was a career best for Smith (Getty)

Opener Guptill powered his way to an 11th ODI century and looked an increasing threat to Australia's hopes of winning the match - despite Smith taking a stunning one-handed catch to help get rid of Watling.

However, Guptill's defiance ended when he tried to launch a long hop from spinner Adam Zampa for another boundary and was caught by the leaping Glenn Maxwell at midwicket.

The 30-year-old's 102-ball 114 included 10 fours and six maximums but his dismissal in the 33rd over left New Zealand on 185 for five and put Australia back in the box seat.