A childhood friend of fellow Hall of Famers Woody Dumart and Bobby Bauer, Schmidt played junior hockey with his mates in Kitchener, Ontario before they would all eventually join the NHL's Boston Bruins in 1934-1935. After playing a final year of junior hockey in Kitchener, Ontario and half a year with the Bruins' AHL farm team the Providence Reds, Schmidt would be called up to the Bruins during the 1936-1937 season. He would quickly prove himself as a hardnosed centerman, a skilled stickhandler and smooth playmaker.

Schmidt and his childhood friends (Bauer and Dumart) would be teamed together in the NHL as well. They would form the famous "Kraut Line". They would be a strong and dependable line for the Bruins for most of the following fifteen seasons. They were a key ingredient to the Bruins' success as they rampaged to the regular season title and a hard fought Stanley Cup victory in 1938-1939. The following season would be Schmidt's true coming out party, as he led the league in scoring and guided the Bruins to another first place finish and the third most goals in team history to date.

The 1941 season saw Schmidt spearhead the Bruins to their second Cup win in three years. The powerhouse Brown and Gold were decimated by World War II the following year as Schmidt, Bauer and Dumart enlisted in the Canadian military and superstar American goaltender Frank "Mr. Zero" Brimsek enlisted with the American Coast Guard. The Kraut Line would find success playing hockey for the Ottawa RCAF team by winning the Allan Cup before heading overseas. Schmidt, Bauer and Dumart would end up missing three productive NHL seasons due to their service in the War.

Schmidt returned for the beginning of the 1945-1946 season. He resumed his starring ways and finished fourth in league scoring in 1946-1947. Schmidt, who was named captain in 1950-1951, won the Hart Trophy as the league's most valuable player that year. Schmidt retired as a player partway through the 1954-1955 season and immediately took over head coaching duties replacing Lynn Patrick.

He would coach the Bruins up to the 1965-1966 season with a year and a half hiatus as Phil Watson took over the reigns for the 1961-62 season and the first 14 games of the 1962-63 season. After coaching the Bruins for 11 seasons Schmidt was hired and took over as General Manager in 1967-68 just as the league ushered in 6 new franchises doubling to a 12 team league. Schmidt would prove to be a great architect in the new era of the NHL acquiring and drafting several key players to build a team that would lead the Bruins to two more Stanley Cups titles in the early 1970's. His biggest deal was a blockbuster and somewhat lopsided as he acquired youngsters Phil Esposito, Ken Hodge and Fred Stanfield from the Chicago Black Hawks in exchange for journeymen Pit Martin, Gilles Marotte and Jack Norris. After his long and incredibly loyal career in the Bruins organization, Schmidt eventually left the team to become the first General Manager of the expansion Washington Capitals for the start of the 1974-1975 season. Unfortunately for Schmidt, the Capitals would set a benchmark in futility that still stands as an NHL record today, as the new NHL franchise finished the year with a miniscule 21 points to finish last in the 18 team league (8 Wins - 67 Losses -5 Ties - 21 Points).

Milt Schmidt's jersey #15 was retired by the Boston Bruins.

Milton Schmidt was inducted into the Hockey Hall of Fame in 1961.