Arnold was awarded the Nobel for her pioneering work with enzymes, the proteins that act as catalysts to speed up other biochemical reactions.
Frances Arnold is the fifth woman to win a Nobel Prize in Chemistry; the last female victor was Ada Yonath from Israel, who shared the 2009 award for discoveries in the structure and function of the ribosome - a minute particle involved in the synthesis of proteins in the body.
Smith discovered a way to evolve new proteins by introducing a gene into a virus, a process known as phage display. Winter used this technology to develop new drugs that have transformed medicine, offering therapies for diseases ranging from cancer to autoimmune conditions. The 77-year-old chemist said his discoveries could not have been made without the earlier work of many others.
Frances Arnold becomes the fifth woman to win the Nobel prize in Chemistry. Many other antibodies created in this way are now in clinical trials, such as those developed to fight Alzheimer's disease, according to the Academy. Smith used them to create a tool that would help identify antibodies, molecules in the body that identify invading pathogens, that would be the most useful for binding to molecules that are associated with certain diseases.
Winter says he realized afterwards there was a "moral imperative" to ensure "what was produced could be used for public benefit".
The method is now widely used in the production of new synthetic drugs, such as recombinant antibodies, to process or produce biofuels and medical treatments.
Arnold received half the prize, and Smith and Winter split the other half.
Arnold will take home half of the roughly $1.01 million prize money, while Smith and Winter will split the remaining funds.
This, said Claes Gustafsson, chair of Nobel Chemistry Committee, was applying the "principles of Darwin in the test tube". Using standard DNA technology, Winter's group then used the bacteriophages to evolve new proteins.
"Very few research breakthroughs are novel".
He built up a collection of phages, with billions of antibody varieties on their surface, and engineered them make them more effective.
"I hope that my getting this prize will highlight the fact that, yes, women can do this, they can do it well and that they can make a contribution to the world and be recognized for it", Arnold said in an email. Arthur Ashkin, Donna Strickland and Gerard Mourou won the Nobel Prize for Physics.
"At first glance it may seem that the Chemistry Nobel has been "biologised" again".
'Today's Nobel prize in chemistry highlights the tremendous role of chemistry in contributing to many areas of our lives including pharmaceuticals, detergents, green catalysis and biofuels.
For the first time in decades, the Nobel line-up did not feature a literature award after a rift within the Swedish Academy over a rape scandal involving the husband of a board member left it unable to select a victor.
To date 107 affiliates of the University of Cambridge have been awarded the Nobel Prize since 1904 - spanning every category: 32 in Physics, 26 in Medicine, 25 in Chemistry, 11 in Economics, three in Literature and two in Peace.