Smart sensors are a compelling addition to large-scale data acquisition networks due to the large number of issues they successfully address. For example, smart sensors simplify and speed installation configuration due to the basic information stored in their on-board TEDS that would otherwise need to be manually input to the data acquisition system. An emerging challenge is the development of smart systems, which rely on smart sensors to provide new levels of reliability. This paper reports on our on-going efforts to apply smart sensors to a rocket test facility. Key to our approach is the hierarchical organization of the intelligent rocket test facility as a system of three fundamental layers: system(s), processes, and smart sensors.