The U's shocked table-topping Gillingham 1-0 at Priestfield in midweek and went on to hand Vale a first defeat in eight away matches.
Chris Wilder's team took a 10th-minute lead in Saturday's League Two clash at the Kassam when former Oxford captain Darren Purse blundered.
The veteran centre-half badly underhit a backpass to goalkeeper Chris Neal and Alfie Potter raced forward to coolly slot home.
But Vale were back on level just six minutes later. Captain Doug Loft, an influential figure in the centre of the park, struck a magnificent 25-yard drive beyond keeper Luke McCormick's outstretched right hand high into the net.
The hosts felt they deserved a penalty when Potter got a shoulder in the back from Ryan Burge, but the referee waved play on.
Burge was himself unlucky in the second half with a brilliant chip from 22 yards that McCormick just tipped onto the bar.
But in the 76th minute Vale failed to clear a corner and Smalley smashed a low angled shot under Neal's legs.
Sean Rigg had the chance to make it 3-1 five minutes from time after Burge tripped Liam Davis in the box, but Neal brilliantly saved his spot kick.