The Sydney-based Waratahs grabbed top spot and booked their place in the playoffs with victory over the ACT Brumbies over the weekend, but need to beat the New Zealanders in the penultimate round of the regular season to keep on track to grab an all-important final on home soil.
The Highlanders, for their part, lie fourth in the standings and will be desperate to sew up a post-season berth before a daunting assignment away to the Crusaders in the last round.
"I think it's important that we stay level-headed and go about what we need to do," Wallabies fullback Folau said in comments published by Fairfax Media.
"That's work hard during the week and then go into the game really confident in the game we want to play.
"You can't get too carried away. It was a good win (on Saturday) and we'll enjoy it but, come Monday, we're back to business."
Coming off a forgettable 2013, Jamie Joseph's Highlanders have made a stunning turnaround to be in playoffs contention and Smith has been at the forefront of the revival.
The 28-year-old scored a try and helped set up another in the rousing win over the double defending champion Chiefs in Dunedin on Friday, continuing his hot form from the June internationals against England.
Dual international Folau has also been in ominous form for the Waratahs and leads the competition with 11 tries, making his rivalry with Smith a mouth-watering sub-plot for Sunday's match at Sydney Football Stadium.
"He's a great player and one of their danger men and, as a team collectively, we have to really watch out for him," Folau said.
"But, for me personally, I just have to get into my routine and do my job for the team. You see glimpses and highlights but I'm more worried about my game and how I can help the team out.
"Certainly Ben Smith is a great player and is going to be one of those players we're going to limit a few of his opportunities."
The twilight match promises to be a high-tempo affair matching top Wallabies backs in Folau, inside centre Kurtley Beale and Adam Ashley-Cooper, against All Blacks' Smith, centre Malakai Fekitoa and scrumhalf Aaron Smith.
"Good luck to both sets of defence on counter-attack on Sunday," Waratahs coach Michael Cheika said.
"With a class player like Ben Smith, I like his attitude and the way he runs the ball back and his work with the back three.
"They're a good team all around, they're an open running team and they'll kill you on counter-attack as well so you've got to be very tidy around how you work."
(Writing by Ian Ransom; Editing by Greg Stutchbury)
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