After stowing away on a ship from Alexandria to London Issy left school aged 14 and enlisted in the British army aged 16, lying about his age. It was also at this time that he changed his name to the Anglicised Issy Smith which he used for the remainder of his life at the behest of the enlistment officer who recruited him.

Issy served with 3rd Battalion Manchester Regiment for 8 years before the outbreak of World War One. During this time he was posted to South Africa and India and was present at the Delhi Durbar parade in 1911 after which he was one of 16 non commissioned officers to be awarded the Delhi Durbar Medal, which is believed to demonstrate his popularity within his battalion as well as his good service record.

After retiring from the army in 1912 Issy moved to Australia, however when war was declared on Germany Issy immediately tried to enrol in the Australian Armed forces and was turned away, being told to find a British Army recruitment centre, which he promptly did being sent back to Europe for Active Service late in 1914.

While serving in Ypres in 1915 Issy was part of an assault on a German trench. During the attack several members of his unit were seriously injured just yards from the enemy position. Rather than flee Issy tended to several of these wounded men, carrying them over 250 yards back to the safety of their own trench returning for other wounded comrades with no regard for his own safety under heavy enemy fire. He was a smaller man of 5"3 and worked to save his comrades till according to a report he eventually collapsed from exhaustion after having remained calm and courageous under fire for the entire day. He was injured during this ordeal by gas attack and sent to Dublin for recovery where he received his Victoria Cross, the first surviving Jew in the First World War to receive such an award.

After winning the Victoria Cross Issy was welcomed as hero in the UK going on a recruitment tour reportedly drawing huge crowds. Though most praised and respected the returning war hero, The Jewish Chronicle reports of one incident of a restaurant refusing to serve him for being Jewish, in spite of his being in uniform and being known as a V.C recipient. In response to the incident reported in the JC a christian soldier who served on the same base as Issy wrote in and stated that Issy was 'looked upon with the greatest respect' and that the 'fellows up here and are very pleased with all of the Jewish boys serving with us in our camp' denouncing the actions of the restaurant owner.