Background Despite a declining prevalence in many countries, smoking rates remain consistently high among young adults. Targeting contextual influences on smoking, such as the availability of tobacco retailers, is one promising avenue of intervention. Most studies have focused on residential or school neighbourhoods, without accounting for other settings where individuals spend time, that is, their activity space. We investigated the association between tobacco retailer availability in the residential neighbourhood and in the activity space, and smoking status. Methods Cross-sectional baseline data from 1994 young adults (aged 18–25) participating in the Interdisciplinary Study of Inequalities in Smoking (Montreal, Canada, 2011–2012) were analysed. Residential and activity locations served to derive two measures of tobacco retailer availability: counts within 500 m buffers and proximity to the nearest retailer. Prevalence ratios for the association between each tobacco retailer measure and smoking status were estimated using log-binomial regression. Results Participants encountering high numbers of tobacco retailers in their residential neighbourhood, and both medium and high retailer counts in their activity space, were more likely to smoke compared to those exposed to fewer retailers. While residential proximity was not associated with smoking, we found 36% and 42% higher smoking prevalence among participants conducting activities within medium and high proximity to tobacco retailers compared to those conducting activities further from such outlets. Conclusions This study adds to the sparse literature on contextual correlates of smoking among young adults, and illustrates the added value of considering individuals’ activity space in contextual studies of smoking.