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Background: In 2008, the Portuguese smoke-free law came into effect including partial bans in the leisure-hospitality (LH) sector. The objective of the study is to assess the prevalence of smoking control policies (total ban, smoking permission and designated smoking areas) adopted by the LH sector in Portugal. The levels of noncompliance with each policy are investigated as well as the main factors associated with smoking permission and noncompliance with the law. Methods: Cross-sectional study conducted between January 2010 and May 2011. A random sample of venues was selected from the Portuguese LH sector database, proportionally stratified according to type, size and geographical area. All venues were assessed in loco by an observer. The independent effects of venues' characteristics on smoking permission and the level of noncompliance with the law were explored using logistic regression. Results: Overall, 1.412 venues were included. Total ban policy was adopted by 75.9% of venues, while 8.4% had designated smoking areas. Smoking ban was more prevalent in restaurants (85.9%). Only 29.7% of discos/bars/pubs opted for complete ban. Full or partial smoking permission was higher in discos/bar/pubs (OR = 7.37; 95%CI 4.87 to 11.17). Noncompliance with the law was higher in venues allowing smoking and lower in places with complete ban (33.6% and 7.6% respectively, p<0.001). Discos/bars/pubs with full smoking permission had the highest level of noncompliance (OR = 3.31; 95%CI 1.40 to 7.83). Conclusions: Our findings show a high adherence to smoking ban policy by the Portuguese LH sector. Nonetheless, one quarter of the venues is fully or partially permissive towards smoking, with the discos/bars/pubs considerably contributing to this situation. Venues with smoking permission policies were less compliant with the legislation. The implementation of a comprehensive smoke-free law, without any exceptions, is essential to effectively protect people from the second hand smoke. ; The work is part of a large Epidemiological Study on the Portuguese Tobacco Control Policy, developed by the Instituto de Medicina Preventiva da Faculdade de Medicina de Lisboa and supported, in its preliminary part, by the Direção-Geral da Saúde (DGS) and, in the second part, by the national funding institution Fundação para a Ciência e Tecnologia (FCT). The funders had no role in study design, data collection and analysis, decision to publish, or preparation of the manuscript.