Harbaugh ended his weekly meeting with reporters on Wednesday by addressing what he says is the "erroneous perception that we were flirting with Peyton Manning."
Harbaugh called the reports silly and phony, then spoke at length about his and the team's ongoing support for Smith, who last season helped the 49ers reach the playoffs for the first time since 2002.
"I've said it all along, Alex Smith has been our quarterback," Harbaugh said. "There's no scenario other than Alex choosing to sign with another team that we would have considered him not as our quarterback. It's time to set the record straight.
"Alex Smith is our quarterback, was our quarterback and (we) had every intention of always bringing him back."
At one point, Harbaugh and other team officials flew to North Carolina to watch Manning work out on the Duke campus.
Harbaugh, though, said the 49ers were only examining Manning and that their interest in him didn't go much further than that.
"Were we out there seeing, evaluating if we could have them both? Heck yeah," Harbaugh said. "You evaluate that, you eliminate the possibility. We would not have given any player out there in free agency a sixth of our salary cap and let six or seven of our own guys go. Hopefully, that sets the record straight. You don't have to keep reporting the silliness or phoniness.
"There was interest (in Manning) and we evaluated it, pursued it, further evaluated it and there was conversations. But there was nothing said to Alex that was not said to Peyton Manning or in house here, on the record or off the record. Both those young men knew exactly what our intentions were."
Smith was caught off-guard when asked about the topic Wednesday, something he first talked about when he signed his new contract in late March.
"Yeah a little bit, a little surprised," said Smith, grinning.
"Coach Harbaugh, from the day I've been here, has been completely honest," Smith said. "I certainly felt like this was my job to compete for, no question. I feel like what we accomplished last year that I deserved that."
Smith said the team had been upfront with him regarding its intentions with Manning and that the two sides remained in contact throughout the entire process.
"I mean, a month prior to any of the Peyton Manning stuff (they) had been negotiating with me to come back and (sign) a new contract," Smith said. "When that arose, they were honest. I knew they were going to see him, check him out, do their due diligence."