Smith, who portrays the magical Genie in Disney's upcoming live-action remake of Aladdin, raced against Fallon on Monday using a motorized scooter that resembles a magic carpet from the film.
The pair drove through an obstacle course that featured street merchants throwing apples, a male belly dancer, a foggy hallway filled with hanging cardboard birds and a makeshift desert complete with a sandstorm.
Smith won the race as he was the first to grab all three of his designated flags and place them into a bowl.
The actor also performed for Fallon part of his new version of classic Aladdin song "Friend Like Me."
Smith said the new version helped him decide to take on the role of Genie and features the drums from "Impeach the President" by the Honeydrippers. Smith then performed a more hip-hop sounding version of the Disney track.
Smith is taking over the role of Genie from the late Robin Williams who voiced the character in Disney's original 1992 animated version of Aladdin. The star recently said that becoming Genie was an intimidating experience but that he brings new flavor to the role.
Aladdin, which also stars Mena Massoud and Naomi Scott, is set to arrive in theaters on May 24.