Note that the exact steps you take vary depending on whether you have a charcoal grill or gas, but the principles are the same. In addition to your regular grill and its fuel source, you'll need just a few inexpensive things, many of which you probably already have on hand.
Regardless of what kind of chips you use, you'll need to soak them in water for 15 to 30 minutes before you use them. If you're curious about what kind of wood chips you should use, we've created this handy guide to wood chips that includes their flavor profile and the types of meats they're best on.
When the wood chips are soaked, drain the water off well. If you're using a gas grill, pile them onto a couple of pieces of aluminum foil. Roll and pinch the foil to create logs, then poke a few holes into each (be careful to not tear the foil so much that the chips fall out).
For a charcoal grill
Lay about half your charcoal on one side of the grill (don't light it yet). Grab a heaping handful (about a cup) of the soaked chips, and toss them on top. Light the other half of the charcoal in a lighter, and dump it on top, making sure you keep half the grill free of charcoal (you'll need to add a drip pan to the other side). Toss another handful of the soaked chips on top of that.
Place an empty aluminum pan, slightly larger than what you're cooking with, next to the charcoal to catch any drippings. Place the cooking grate over the coals.
Fill an aluminum loaf pan with water, and place it directly over the coals. This will act to maintain a lower smoking temperature.
For a gas grill
Place the foil logs directly over (or as close as you can without smothering) the flame. Some grills may have a convenient area for this, whereas on others you may need to use the grates. Light the grill as usual.
For a charcoal grill
Put the lid on the grill, place a thermometer into one of the vents so you can gauge the temperature, and let it preheat for about 20 minutes or until the temperature is around 200 to 250 degrees F.
Lay the meat (or whatever you're smoking) over the drip pan (not over the coals, as that's where the water is). Make sure your vents are over what you're cooking so the smoke is forced over toward that direction. If they're over your pan of water (and thus, the coals), the smoke will just go right out.
If the temperature gets too high, you may need to close your vents some to restrict the oxygen (just don't close them all the way, or the flame will go out).
For a gas grill
Preheat the grill to between 200 and 250 degrees F. If you have a top rack, use that to smoke your meat or other ingredients. If not, try to place it away from the chips and in the coolest part of your grill. If necessary, you can turn an aluminum pan upside down and use that to raise the meat off the heat (or just use a smoking rack). If you use the second rack, place the aluminum pan right side up under your meat to catch any drippings.
Once you have it preheated and the meat in, close the lid, and don't open it again for a while. You want that smoke to build up. How long depends on what you're making. Fish cooks up in about 20 minutes in a smoker, so you shouldn't open it until you're ready to check it. With a longer-cook meat (like ribs), leave it at least 45 minutes to an hour. And whatever you do, make sure that temperature stays around 200 to 250 degrees F.
After that, you can open it to baste or spritz it with juice. For a long-cook meat, you may also need to have more soaked wood chips prepared. Once what you have turns to ash, it's not doing much to add flavor to the meat.
And don't use this method just for meat. You can smoke just about anything.
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