Precision-guided munitions (smart munitions or smart bombs) are self-guiding weapons intended to maximize damage to the target while minimizing "collateral damage". Because the damage effects of an explosive weapon scale as a power law with distance, quite modest improvements in accuracy (and hence reduction in miss distance) enables a target to be effectively attacked with much smaller bombs. Thus, even if the bomb misses, collateral damage is greatly reduced. These weapons make use of computerized guidance systems.

Although experimented with during World War II, and used increasingly by the USAF in the last few years of the Vietnam War, they first gained public recognition during Operation Desert Storm when they were used by the US against Iraq.

The first smart bombs were equipped with television cameras, and transmitted a "bomb's eye view" of the target back to a controlling aircraft. An operator in this aircraft then transmitted control signals to steerable fins fitted to the bomb.

Next generation smart bombs used laser guidance, relying on the target being illuminated by a "target designator" on the ground or on an aircraft, but were not usable in poor weather conditions where the target illumination could not be seen, or where it was not possible to get a target designator near to the target. The laser designator sends its beam in a series of encrypted pulses so that the bomb cannot be confused by an ordinary laser.

Modern smart bombs such as JDAM use satellite navigation systems, specifically the United States' GPS system. This offers improved accuracy compared to laser systems, and can operate in all weather conditions, without any need for ground support. Because it is possible to jam GPS, the bomb reverts to inertial navigation in the event of losing the GPS signal. Inertial navigation is significantly less accurate; JDAM achieves a CEP of 13 m under GPS guidance, but typically only 30 m under inertial guidance. Further, the inertial guidance CEP increases as the dropping altitude increases, while the GPS CEP does not.

The precision of these weapons is dependent both on the precision of the measurement system used for location determination and the precision in setting the coordinates of the target. The latter critically depends on intelligence information not all of which is accurate.

Another potential problem with smart bombs is the distribution of misses. Misses from older, unguided munitions are generally normally distributed around the aim point. Thus it can be assumed that the further you are from the target, the safer you are. On the other hand, most smart bomb misses are caused by system failures - a jammed steering fin, computer failure, loss of homing signal, etc. In this case, the weapon is actually more likely to miss the target by a very large distance, than by a small distance.

The creation of precision-guided munitions resulted in the renaming of older bombs as "gravity bombs".

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