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John Steed leads undoubtedly not a healthy life. It is partly due to his opponents, who often try to kill him. But also the result of that Steed drinks a lot and smokes too much.

Quite surprisingly, Steed announced in The Nutshell that he would not smoke. That was a result of the intense interrogation there, as it is not true.

Steed was a heavy smoker in series 2 (and I guess in series 1), where he smoked cigarettes most of the time and a few times cigars. In later episodes, he smoked less or no cigarettes and started to smoke cigars.

The last cigarette smoke-filled Steed's lungs in Man with Two Shadows, but he kept a cigarette case in his breast pocket - for his friends who were stupid enough to smoke, as Steed said in TNA K is for Kill. Bad for the health of his friends. Butt good for him as this cigarette case stopped a bullet to his chest in that episode.

Steed smokes in episodes:

Series 2:

Mission to Montreal, Dead on Course (2x), Death Dispatch, Mr. Teddy Bear, The Decapod (3x), Bullseye (cigarette and cigar), The Removal Men, The Mauritius Penny, Death of a Great Dane, Box of Tricks, School for Traitors.

Series 3:

Brief for Murder (cigar), The Golden Fleece (cigar), The Wringer (soggy cigar) and The Little Wonders (cigar), The Medicine Men (cigar), Man with Two Shadows (cigar), Trojan Horse (cigar), The Outside-In Man (cigar). In The Outside-In Man, Steed is using a chopper to cut the cigar's end.

Series 4:

Room Without a View - cigar, Steed as Webster smokes a cigar in Two's a Crowd, there's an ashtray in his bedroom as seen in Too Many Christmas Trees.

Series 5: 

The £ 50,000 Breakfast - cigar, there's a cigar box in his living room in Who's Who???. Steed is shocked as he realizes that Basil bites the cigar's end off, but younger Steed did exactly the same thing. One can see ashtrays in his living room.

Series 6:

Steed finds his cigar box in Tara's present box in episode Noon Doomsday; ashtrays can be seen all the time in his living room.
In The Correct Way to Kill, he offers Olga a cigarette, and he stores them in a yellow marble box that stands on his desk. Sometimes you can see a silver cigarette box on one of the tables.
Steed smokes cigarettes most of the time by using a mouthpiece, he bought some cigarettes in Box of Tricks, normally he's using a lighter, but sometimes a matchbox as in Room Without a View and there's a matchbox in The Golden Fleece which Mrs Gale throws after him.
The Decapod Death Dispatch The Golden Fleece
Removal Man The Little Wonders 50000 Pounds Breakfast
Steed Quotes about smoking

Smoke if you like. No I'm a healthy horse (My Wildest Dream).

I don't smoke (The Nutshell).

I don't smoke myself. But I keep some for my friends how are stupid enough to do (TNA K is for Kill: Tiger by the Tail).

A man who would bite the end off a cigar is capable of anything. (Who's Who???).
[List of episodes where Steed is smoking series 1 - 6]
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Steed's Biography