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Championship leader Matteo Ferrari finished just outside the podium and will take a 12-point lead over Garzo into Sunday’s decider, with Smith also retaining mathematical chances at the title.
Despite a good launch from pole for Granado, Smith overtook the Brazilian into the first corner and swiftly pulled away from the pack, leading by eight tenths at the end of the first lap of seven.
But while Granado himself came under pressure from Garzo in second, he then started to reel the race leader back in over the next few tours, with both him and Garzo arriving on the back of Smith with two laps left to run.
The pair slipstreamed past Smith on the straight to start the penultimate lap, only for Smith to retake second place from Garzo a few corners later.
A lap later, Garzo got back past again on the main straight, was passed by Smith into Turn 1 and then instantly retook the spot once more in the next corner.
By then Granado had broken away sufficiently to secure a first win, the Brazilian taking the chequered flag by half a second over Garzo, who fought off a last-corner lunge from Smith.
Ferrari had started on the front row but immediately dropped down to fifth, although he would pass Granado’s Avintia squadmate Xavier Simeon to secure fourth place.
The Gresini-run Italian rider can ensure he becomes the first-ever MotoE champion tomorrow by finishing in the top four again.
Alex de Angelis took sixth place for Pramac, ahead of LCR’s Niccolo Canepa and Intact’s Jesko Raffin, with de Angelis’ teammate Josh Hook and SIC 58’s Mattia Casadei making up the top 10.
World Supersport ace Lucas Mahias, who was due to replace the injured Niki Tuuli at Ajo in this weekend’s races, had to withdraw after significantly damaging the little finger on his right hand in a practice crash.
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Valencia MotoE: Ferrari takes title as Granado wins again