Smart defence is becoming an increasingly dominant topic on NATO’s agenda. Politicians, the academic community and other security experts quickly latched on to the term “smart defense”. It became a catch phrase even in popular literature and the mass media. The aim of this article is to look at the smart defense initiative from small states’ perspective. This article should fill a gap that exists between the theoretical model of smart defense and the behavior (response) of small nations to the challenges posted by this initiative. The article is divided into two parts. The first part discusses factors that influence decisions of small states. The second part examines national responses and practical initiatives that nations undertake in response to this challenge.