It is claimed that Fiona Forster sold packets of imported cigarettes to students for pound;3 while employed as a part-time cover teacher at Meopham school, Kent, last year.
She denied the charge of unacceptable professional conduct at a conduct committee for England's General Teaching Council.
Ms Sarah Kelsey, headteacher, discovered that cigarettes had been sold after a pupil's bag had been reported stolen on the school's sports day.
Two pupils claimed that they had used the bag to store cigarettes given to them by Miss Forster.
They said the teacher had given them her car keys and told them to take 4 to 5 boxes of 200 cigarettes to sell to students for pound;3 a packet.
Miss Forster told the head that the cigarettes were to be passed on as payment to a boy's father, who had carried out work for her.
She had been suspended, pending an investigation which found that she had phoned another pupil asking her to talk to her classmates and persuade them to deny they had received cigarettes from her.
In a text message she told the pupil she may go to prison and would commit suicide.
Further interviews with students led to the discovery of CCTV footage, which was seen in private by the GTC committee, showing pupils passing coins to the teacher. They admitted they had bought cigarettes from Miss Forster and sold them for her.
Miss Forster, was present at the hearing but did not give evidence. Ian Thomas, her representative, denied the allegation. He questioned the validity of the pupils' statements.
Robert Millea, the committee chair, said: "This was a serious instance of unacceptable conduct, and, whilst Miss Forster did not show insight, it is not considered that there is a serious risk of her repeating this behaviour. This suspension order is for a six-month period".