A smart DNS proxy server is a DNS server that directs clients to a proxy server for a certain list of websites and services. Access to the DNS server and proxy is typically available as subscription plans to so-called Smart DNS services. These services grant access to websites and services that restrict digital media content availability by region, acting as an intermediary between the client and the website or service. This is accomplished by obscuring the client's IP address that is used to establish a user's location.

A smart DNS proxy server enables a client, such as a computer or mobile device, to access region-restricted or blocked content from anywhere in the world. A connection between the client and the site serving restricted content is established through a proxy server located within the approved areas for streaming or downloading the content. As with a virtual private network (VPN) proxy, this allows a user to stream or download content which is normally blocked for viewing by people within that region. Unlike VPN proxy, a smart DNS proxy does not encrypt communications and does not direct all internet traffic via the proxy. Instead, it selectively directs traffic for certain sites, typically those of popular streaming services, via the proxy. This is achieved by overriding selected DNS entries so that DNS queries resolve to the address of the proxy rather than the real server. Only the relevant information needed for a user to view the digital media content is routed via the proxy. This is information related to a user's geographical location.

A smart DNS proxy does not require a user to install any third-party applications or software on a device.

A user can immediately access region-restricted or blocked content once the user has changed the DNS of a device to connect with a smart DNS server.

A smart DNS proxy can be installed and set up across an entire network of devices such as desktop computers, laptops, mobile smart phone devices, smart televisions, and Internet-capable gaming consoles, and is compatible with all mobile operating services including Android, Apple's iOS, Blackberry and Windows Phone.

Smart DNS proxies allow users access to region-restricted content by intercepting and re-routing data or information being exchanged by proxy servers located within the region which has been approved for viewing.

A smart DNS proxy does not encrypt data, technically this could mean faster connection between website and computer.

A Smart DNS cannot be used for traffic encryption or security purposes.

Due to the lack of end-to-end encryption, data packets can be seen by the ISP or on any intermediate network.

For additional security and encryption virtual private network (VPN) services should be used.

The dangers of using an unknown IP address as a DNS recursor are similar to any other rogue DNS server performing DNS hijacking in that the user is not aware which parts of his traffic are redirected and intercepted. In addition, the proxy servers themselves are in a position to perform man-in-the-middle attacks on any traffic passed through them. For this reason it is quite common to install a second router in the house specifically for media streaming.