With recent advancements in Internet technologies and wireless communications, wireless sensor network (WSN)‐based smart systems are gaining an enormous increase in use in various applications (eg, healthcare, smart home, smart manufacturing, smart power grids, and smart transportation). Due to the mission‐critical or safety‐critical nature of smart system applications, it is imperative that a smart system be reliable during its mission time. However, reliability analysis and design of smart systems are still open challenging research problems due to complicated dependencies existing in the WSN domain or the physical domain monitored by the WSN, and due to dependencies crossing the two domains. This paper proposes a new behavior‐driven reliability modeling methodology for accurate and efficient reliability analysis of complex WSN‐based smart systems, contributing toward their robust designs and operations. The suggested method can address effects of dependent behaviors affecting different domains of the smart system in a combinatorial manner. It also enables the use of efficient single‐domain reliability methods to retain their efficiency. A case study of a smart home system is performed to demonstrate the application of the proposed method as well as its advantages in handling nonexponential time‐to‐failure distributions and in analyzing smart systems with complicated intradomain and cross‐domain dependencies.