The team described Smith's return as "uncertain," but said he will miss the start of training camp. However, Smith's agent Derrick Fox said Smith should be ready to play in the Sept. 12 season opener against the Giants.
This is the second key injury to strike the Panthers in recent weeks.
In OTAs, linebacker Thomas Davis re-tore a ligament in his knee and could be lost for the season.
Smith's injury isn't nearly as crippling.
"He basically was messing around and playing some flag football," agent Derrick Fox said. "He was playing some defensive back. He tried to break up a pass and slipped and fell. He caught himself with his arm and it broke. It was the same arm as last time, but a little different spot. He knew it right away. The x-rays showed a break."
The Panthers could withhold Smith's base salary if he misses any regular season games, but the team has no plans to do that.
Fox said Smith feels "extremely bad."
"Oh yeah, definitely," Fox said. "He feels awful because of the relationship he has with Marty and (owner) Mr. (Jerry) Richardson. He doesn't want them to think he was being careless."
Fox said he expects Smith will be ready for the start of the regular season.
"These are things make Steve hunker down and get ready to go," Fox said.
Smith, 31, ranks first in team history with 58 touchdowns and has 32 games of 100 or more yards receiving. Smith, clearly the veteran of Carolina's young receiving corps, had 65 catches for 982 yards and seven touchdowns in 15 games last season.
DE Charles Johnson
He's shown flashes of talent here and there and had a few standout games -- he had four tackles, two sacks and two forced fumbles in a win last year against Tampa Bay -- but there's a strong sense around Bank of America Stadium that Johnson is a kid about to tap into his true potential as a professional. In short, coaches love him.
And now, entering his fourth season, a much lighter and quicker Johnson seems poised to jump to the forefront. With Peppers' departure to Chicago, Johnson has a chance to start for the first time in his career.
"I'm excited," Johnson said. "I'm real excited because I've never started before. I still don't know for sure if I'm going to start, but I'm happy with how things are going right now. And we have a lot of young guys, so I'm excited about this defensive line right now. It's a lot of new-name faces, so some people have got to make a name for themselves. I feel like this D-line is a no-name line."
Johnson has been running with the first team at left defensive end opposite Brayton.
--Everette Brown, the team's highly-touted second-round pick, hasn't been able to supplant either Tyler Brayton or Charles Johnson in the starting lineup and the Panthers could be looking to bring him off the bench in pass rushing situations.
A big part of that is because the Panthers believe Johnson is on the verge of a breakout season.
He had six sacks in 2008. But that number dipped to four in 2009 as a shoulder injury limited his productivity on the field and forced him to be held out of three full games.
"I hope so, I'm really hoping so," Johnson said with a laugh when asked if this can be breakout season. "I feel good about this season. I'm feeling really good."
--Panthers rookie DE Greg Hardy looked extremely impressive during conditioning drills on the final day of OTAs. After the final practice players had to run from one side of the field and back twice. Then, they were asked to do it again.
Both times Hardy finished at least 20 yards ahead of the pack.
He didn't even appear winded after the runs.
He even ran two more sprints with the rest of the team and finished near the front despite running against receivers, tight ends, running backs, linebackers and defensive backs.
The kid has great speed and a great big frame. He was also very productive in college. It makes you wonder if the they've stumbled upon a football player with this sixth-round pick.
--The Panthers are expecting running back Jonathan Stewart, who did not participate in OTAs, to be ready to go in training camp. Stewart led the team in rushing last season.
QUOTE TO NOTE: "Steve has talked to me and feels terrible about it. Now his focus is on the rehabilitating process and getting back as quickly as he can." -- Panthers GM Marty Hurney on Steve Smith's injury.
STRATEGY AND PERSONNEL
The Panthers are wasting no time signing their draft picks.
Already seven picks have signed, the latest being linebacker Eric Norwood, a fourth-round choice (124th overall) from the University of South Carolina. A three-time All-SEC performer and career sack leader at the school with 29, Norwood is expected to see action at defensive end and outside linebacker for the Panthers.
Norwood posted seven sacks and 11.5 tackles for loss as a senior earning All-America honors.
Carolina's only unsigned draft picks are second-round pick QB Jimmy Clausen and third-rounder WRs Brandon LaFell and Armanti Edwards.