The Dolphins clinched a home wild-card playoff game. When the New England Patriots won earlier Sunday at Carolina, the Dolphins were eliminated from division title contention.
Miami (11-5) will host either the Baltimore Ravens or the New York Jets next weekend.
Smith registered his third 100-yard outing of the season and first since Dec. 10. In his previous three games, the 5-11 224-pound running back rushed for a combined 59 yards in his previous three games.
The Dolphins dominated the ground game, outrushing the Bills 202 yards to 39.
"The best thing about today's win was that it was the type of win that we enjoy," Dolphins Coach Dave Wannstedt said. "We ran the ball for over 200 yards and we held them to about 30 yards rushing. I think with a win today, we're going into the playoffs with some confidence."
Wannstedt guided the Dolphins to their second straight playoff berth in his two-year reign. Miami won the AFC East title a year ago.
Marion grabbed Miami's third pick of the game and lifted the Dolphins to 6-0 when they record a defensive touchdown.
"I just played inside the guy and didn't really think he (Travis Brown) was going to throw it," Marion said. "Then when he throws, I'm down the sideline."
Marion recorded his second touchdown in as many weeks and just the third his nine-year NFL career. He returned an interception 26 yards for a touchdown last Sunday as the Dolphins clinched a playoff spot for the fifth straight season with a 21-14 win over the Atlanta Falcons.
The Nevada product's only other score also came in a regular-season finale, but in a Dallas Cowboys' uniform. On Christmas Day, 1995, Marion returned an interception 32 yards for a touchdown at Arizona.
However, the Dolphins have injury concerns entering the postseason. Pro Bowl middle linebacker Zach Thomas was sidelined with a shoulder injury and rookie receiver Chris Chambers left the game late in the first quarter with a sprained right ankle.
"We had a couple of guys out, they were banged up. But that's where NFL experience and having depth comes in," Dolphins cornerback Sam Madison said.
Wannstedt said he also expects receiver Oronde Gadsden (hamstring injury) and defensive tackle Jermaine Haley (rested) to return next weekend.
Pro Bowl fullback Larry Centers caught a 12-yard touchdown pass in the third quarter for the Bills, who lost for the ninth time in their last 11 games.
"We were not able to overcome turnovers and penalties in untimely places," Bills coach Gregg Williams said. "When pressed to get back into the game, our younger players committed some turnovers, negating some significant big-play opportunities."
Jay Fiedler threw for a touchdown and ran for another. The Dolphins quarterback completed nine of 16 passes for 110 yards with no interceptions as Miami improved to 7-1 at Pro Player Stadium this season.
"Not having to travel, not having to exhaust yourself going on the road, getting the home crowd going -- being a little more hyped up at home -- it's just going out there and playing better," Fiedler said.
Fiedler has won all four of his contests with Buffalo.
The Dolphins' defense proved dominant in the first half. They held the Bills to just 13 yards and two first downs on six possessions, which resulted in an interception and five punts.
But second-year quarterback Travis Brown, who replaced the injured Alex Van Pelt early in the second quarter, went four for four on the Bills' first drive of the second half. He capped the seven-play, 84-yard effort with a strike to Centers to cut Buffalo's deficit to 13-7.
But Fiedler found receiver James McKnight in the end zone with a 16-yard pass early in the fourth quarter and had an 18-yard touchdown run down the left sideline with 8:03 left to give Miami a 20-point lead.