In the very little play that was possible after lunch, Labuschagne brought up his 50 off 88 balls and was looking good before Craig Overton castled him to break the 116-run stand between him and Smith for the third wicket.
There was no stopping Smith at the other end though, as he marched on to a fifty by hitting Ben Stokes for a four in his unique and ridiculous fashion, groping at a length ball hanging miles outside off stump and knocking himself off his feet to drive through covers.
In the next over, Labuschagne was dismissed and Travis Head joined Smith who was on 60 from 93 balls. Head was batting on 18.
Earlier, Skipper Tim Paine won the toss and chose to bat first on a chilly morning at Old Trafford with the pitch bereft of much grass.
While the tourists welcomed back Smith into the fold after he was out of the third Test with a concussion injury suffered in the second rubber, England made one change to their Playing XI, including right-arm fast bowler Overton for all-rounder Chris Woakes.
The Aussies lost David Warner in the first over, the experienced southpaw dismissed by Stuart Broad for the fifth time in this series. Warner was trying to leave a ball outside the off stump, but his late decision got the red cherry to take the outside edge of the bat and fly to Jonny Bairstow.
Fellow opener Marcus Harris (13) did not last long too, Broad trapping him in front during a spell of superb fast bowling where he got his seam position perfectly right.
In came Smith to a not so rousing reception. But the best was saved for Jofra Archer when he came to bowl to the former Australia captain for the first time since knocking him over with a ferocious bouncer that led to the world's best Test batsman's delayed concussion.
Smith crunched Archer for a four through the covers to win the early duel, while at the other end, Labuschagne who was Smith's replacement initially continued his good work by hitting eight delectable fours to race to 49 off 82 balls. Smith was batting on 28 from 48 deliveries.
The five-match series is currently tied at 1-1.
Brief scores: Australia 1st innings : 170/3 (Marnus Labuschagne 67, Steve Smith 60 batting; Stuart Broad 2/35) at tea on Day 1
( With inputs from IANS )
