Clayton made the trip to the German capital on an unwanted run of three straight quarter-final defeats, but he returned to winning ways in emphatic style to catapult himself into fifth position in the table.
The Welshman kicked off his campaign with a dramatic deciding-leg win over Michael van Gerwen, inflicting the reigning champion's second quarter-final defeat of the season.
The 2021 champion then fired in a ton-plus average to overcome fellow Welshman Gerwyn Price in the semi-finals, denying his compatriot a third consecutive nightly victory in the process.
This set up a clash against World Champion Smith in the Night Nine showpiece, and Clayton produced a devastating display of combination finishing to scoop the £10,000 winner's bonus.
The 48-year-old won three straight legs to establish a 3-1 cushion, but after he missed two darts at tops for a 4-1 lead, Smith seized the initiative by reeling off three consecutive legs of his own.
The world number one had converted a stunning 130 checkout in leg six to level, but two missed darts for a 5-3 lead in leg eight ultimately turned the tide.
Clayton capitalised on further missed doubles from Smith in leg nine, firing in a two-dart 85 finish to move to the brink of victory, before he sealed the success with a clinical 120 checkout.
"I know I can do it. I rode my luck a few times, but it's a nice feeling to get back to winning ways," reflected Clayton, who topped last year's league phase with four nightly wins.
"The last two weeks Gerwyn Price absolutely demolished me, and it was difficult.
"Michael [van Gerwen] didn't play his game tonight, but I had to concentrate on my own game, and now I've got a smile on my face and a win under my belt.
"For some reason, my confidence was brilliant tonight. I felt comfortable and the crowd were absolutely fantastic.
"There is massive pressure every week, but tonight I've done the job and the table looks so much better. Hopefully I'm here until the end and I'm going to try my very best!"
Clayton was presented with a commemorative "Buddy Bear" by Berlin's Mercedes-Benz Arena to celebrate the title, and he added: "It's a wonderful gift and it will look great in my trophy cabinet.
"It's the most colourful thing I've won and will be a good memory of winning this night."
Smith was bidding to join Van Gerwen and Price in securing multiple nightly victories this season, but he was unable to follow up his Night Three success with glory on German soil.
Despite this, following back-to-back defeats to Chris Dobey in Nottingham and Newcastle, the St Helens star claimed a precious three points to leapfrog Nathan Aspinall and move into third spot.
The world number one secured a comfortable 6-3 win over Dimitri Van den Bergh in his opener, before producing the performance of the night in his last four victory against Aspinall.
Smith wired double 12 for the first nine-darter of this year's tournament in leg four, and he maintained that blistering form to progress with a 104 average and seven maximums.
In Thursday's other quarter-finals, Price cut Van Gerwen's lead at the summit to five points with a convincing victory over 2017 runner-up Peter Wright.
The Welsh superstar recovered from an inauspicious start to triumph with a 101 average, reeling off five straight legs to leave Wright seven points adrift at the bottom of the table.
Aspinall, meanwhile, moved through to his seventh semi-final in nine weeks with a superb 6-4 success against Dobey, averaging over 103 to prevail in a high-quality contest.
The Cazoo Premier League continues on Thursday April 6, as Birmingham's Utilita Arena plays host to Night Ten, which features a mouth-watering quarter-final tussle between Clayton and Aspinall.
Elsewhere, Price plays Van den Bergh, Van Gerwen takes on Dobey, while Smith and Wright also collide in the Midlands.
2023 Cazoo Premier League - Night Nine - results
Michael Smith 6-3 Dimitri Van den Bergh
Nathan Aspinall 6-4 Chris Dobey
Jonny Clayton 6-5 Michael van Gerwen
Gerwyn Price 6-3 Peter Wright
Michael Smith 6-4 Nathan Aspinall
Jonny Clayton 6-4 Gerwyn Price
Jonny Clayton 6-4 Michael Smith