Back in Liverpool, Smith was left out of the side that started the 1976–77 season but, when Thompson picked up an injury in Liverpool's 1–0 win over Newcastle in the month of March, he was recalled and kept his place as the side went on to retain the League title. Smith then played in the 1977 FA Cup Final which Liverpool lost to bitter rivals Manchester United, thereby losing the chance of a treble, with the club's first European Cup final in Rome due a few days later. Despite the disappointment of the defeat at Wembley, Liverpool played magnificently to beat old UEFA Cup foes Borussia Mönchengladbach 3–1, with Smith scoring a towering second-half header from a corner taken by Steve Heighway to make the score 2–1. It was his first goal of the season, and the 48th and final for the club. The BBC commentator Barry Davies described the goal with the words "It's Tommy Smith! Oh what an end to a career."