Scotland coach Gregor Townsend, himself a former Test No 10, took the controversial decision to drop Finn Russell from his squad for the entire series - although the gifted playmaker may well not have been released by his Paris-based club Racing 92 this weekend as the Australia match falls outside the official window for end-of-year Tests.
Edinburgh's Kinghorn, who started in a 34-31 third Test defeat by Argentina in July where Scotland let slip a 15-point lead, now has a chance to cement his place at stand-off after being named on Thursday in Townsend's starting XV.
"The door is not closed on any player," Townsend said when asked about a possible return for Russell after naming his side to play the Wallabies.
"The door is open to all our players."
Smith wins his second cap in the absence of former Scotland captain Stuart Hogg, with the Exeter full-back having been struggling with several niggling injuries.
Glasgow's Smith wins his second cap in the absence of Exeter's Stuart Hogg, while Jamie Ritchie captains the side.
Former Australia back-row Jack Dempsey, capped 14 times by the Wallabies, could make his Scotland debut off the bench, through World Rugby's new birthright eligibility rule.
Scott Cummings has been out of the squad for the series due to a broken toe, with the lock replaced by Glen Young, who comes straight onto the bench ahead of Richie Gray.
Dave Cherry has been selected ahead of George Turner and Ewan Ashman at hooker, with blindside flanker Jamie Ritchie captaining the side for the first time since being named as Hogg's successor by Townsend.
Scotland, following the visit of an Australia side coached by former Glasgow boss Dave Rennie, will be at home to Fiji, New Zealand and Argentina on successive weekends.
Scotland team (15-1) to play Australia at Murrayfield on Saturday, (kick-off 1630 GMT)
Ollie Smith; Darcy Graham, Mark Bennett, Sione Tuipulotu, Duhan van der Merwe; Blair Kinghorn, Ali Price; Matt Fagerson, Hamish Watson, Jamie Ritchie (capt); Grant Gilchrist, Sam Skinner; Zander Fagerson, Dave Cherry, Pierre Schoeman
Replacements: George Turner, Jamie Bhatti, Willem Nel, Glen Young, Jack Dempsey, George Horne, Ross Thompson, Damien Hoyland
Coach: Gregor Townsend (SCO)
