Smith, who has scored 45 goals and won 111 caps for England, has won her battle to be fit after breaking her leg in March to secure her place among the 18-strong squad.
The 33-year-old Arsenal Ladies playmaker has been England's top player since beginning her international career in 1995.
The squad, making its Olympics debut, is drawn exclusively from England and Scotland, who supply two players.
Hope Powell is head coach, with Team GB opening the tournament against New Zealand at the Millennium Stadium on 25 July, the first competitive action of the Games.
Team GB Chef de Mission Andy Hunt said: "I'm immensely proud to welcome the women's football team into Team GB for the London 2012 Olympic Games. Having the opportunity to field a women's football team at the Olympics is a truly historic moment for us.
"The squad includes veterans that have played for some of the best club sides in the world, right through to those whose potential is still blossoming. But for all of them, the opportunity to represent Great Britain at a home Olympic Games is a new and unique experience.
"We all share their excitement in being part of the legacy of London 2012. In Hope Powell, the team has not only a vastly experienced and respected coach, but also a true ambassador for the game.
"The strength of the Team GB selection owes a great deal to the work she has done for women's football and she will be an inspirational figure to have on the touchline.
"The whole country will be behind the team when they kick off against New Zealand, and hopefully they can set the tone for a successful Games by getting off to a winning start."
Great Britain squad:
Eniola Aluko (Birmingham City Ladies), Anita Asante (Gothenburg), Karen Bardsley (Linkoping), Sophie Bradley (Lincoln Ladies), Rachel Brown (Everton Ladies), Karen Carney (Birmingham City Ladies), Ifeoma Dieke (Vittsjö GIK), Stephanie Houghton (Arsenal Ladies), Kim Little (Arsenal Ladies), Claire Rafferty (Chelsea Ladies), Alex Scott (Arsenal Ladies), Jill Scott (Everton Ladies), Kelly Smith (Arsenal Ladies), Casey Stoney (Lincoln Ladies), Fara Williams (Everton Ladies), Rachel Williams (Birmingham City Ladies), Ellen White (Arsenal Ladies), Rachel Yankey (Arsenal Ladies)