Steve Smith hit a record-breaking century and took two superb catches as Australia beat New Zealand by 68 runs in the Chappell-Hadlee Trophy one-day series opener in Sydney on Sunday.

The Australia skipper smashed 164 off 157 balls, the highest one-day international score at the Sydney Cricket Ground, to lead Australia to 324 for eight.

Player of the match Smith struck 14 fours and four sixes in his seventh ODI century after winning the toss to give the Black Caps a tough target to chase down.

Smith then took two great catches and paceman Josh Hazlewood claimed three wickets to dismiss the Kiwis for 256 in 44.2 overs.

Smith's knock, the seventh highest by an Australian, surpassed South Africa's AB de Villers 162 at the same ground in last year's World Cup.

It was also the joint-highest by an Australia captain. Ricky Ponting also made 164 against South Africa in Johannesburg in 2006.

He then underlined his player-of-the-match qualities with two decisive catches in the Black Caps' innings.

It was his throat-high catch at slip that got a big breakthrough to dismiss skipper Kane Williamson for just nine.

Smith later latched onto a flying one-handed screamer to dismiss BJ Watling for six off Mitchell Marsh, hurling himself to his left in the gully for a stunning catch.

"I got a bit of luck. I was probably out lbw at one point," Smith said.

"It's nice to get my highest score at my home ground and post a huge total.”

Opener Martin Guptill raised his 11th ODI century with a mighty six off Marsh over long-on off 93 balls and was his side's major hope of reeling in Australia's huge target.

But leg-spinner Adam Zampa coaxed Guptill into a false shot to find fielding substitute Glenn Maxwell at mid-wicket and he was on his way for 114 off 102 balls in the 33rd over.

SCORES IN BRIEF

AUSTRALIA: 324 for 8 in 50 overs (Warner 24, Smith 164, Bailey 17, Head 52, Wade 38; Henry 2-74, Boult 2-51, Neesham 2-58)

NEW ZEALAND: 256 all out in 44.2 overs (Guptill 114, Neesham 34, Munro 49, Henry 27; Hazlewood 3-49, Marsh 2-38, Cummins 2-62, Zampa 2-66)

Result: Australia won by 68 runs.

Player-of-the-match: Steve Smith.