A winning smile takes the prize. Each August residents of Sun City (or is it `Fun City'?) engage in a little competitive grinning

EARLY on a steamy August afternoon, 200 residents of this busy retirement community have assembled in King's Point Auditorium for one of the least strenuous activities of the year: the fourth annual Sun City Center Smile Contest. Smiles are everywhere: on contestants and judges, on a six-foot-wide paper sunburst with a happy face, and on orange happy-face balloons. In addition, a magician named Yaro Hoffman is playing the audience for all the laughs he can get.

``Is this Sun City or Fun City?'' he asks. ``I always thought it was Fun City.''

But every competition - even something as low key as a smile contest - produces its own anxiety. And for a few participants there's nothing very Fun City about posing for a pink-shirted hostess with a Polaroid.

``It's awful,'' one woman groans, looking at her picture.

``My first one didn't turn out, and this isn't any better,'' another woman says.

``Well, it's not easy to smile on command,'' her husband replies.

Fortunately, being photogenic is not the point. As Heloise, the syndicated household-hints columnist who founded National Smile Week in 1980, explains, ``We're not looking for cosmetically perfect smiles - perfect teeth, great gums, good lips, flawless skin. A smile has to be accompanied by a twinkle in the eyes. Then you know it's genuine.''

But why a contest, even for genuine smiles?

Heloise offers a rationale: ``Life is not easy. When you look at the front page of the newspaper, it's not very happy. A smile doesn't cost anything. It makes you feel good, and it makes someone else feel good.''

To illustrate her point, she recounts part of a brief talk she gave earlier today in her role as the event's ``token celebrity.''

``A lot of these people live alone,'' she says. ``So I told them, `Look, when you get up in the morning, smile at yourself in the mirror. Pat yourself on the back.' Right away I saw two women in the audience smile and pat each other on the back.''

It isn't the first time Heloise has influenced residents. As a luncheon speaker here a few years ago, the columnist offered tips many listeners took to heart.

``I still put my nail polish in the refrigerator, along with my pantyhose,'' Grace Gillette tells a contest judge in one of the brief, amiable interviews that, along with smiling, constitute the competition.

``What are your favorite hobbies?'' judge Rod Caborn asks Monica English.

``Gardening and dancing,'' she replies. Then, with an affectionate glance at her husband, she adds, ``You can't beat an Irishman when it comes to dancing.'' Another competitor, colorfully dressed in plaid pants and a green knit shirt, sports a yellow cap from the College of William and Mary, where he worked before retirement. ``We're so glad we're not there anymore,'' he confides to Mr. Caborn. His wife agrees, adding, ``The only thing we don't like here are the armadillos. They're terrible.''

Caborn laughs. ``Nobody tells you about the armadillos until you move here,'' he says. ``People think they're all in Texas.''

Caborn jots down his scores for the pair, then greets another couple. ``How long have you two been married?'' he asks Leonard Griffin, whose entry forms list his age as 94 and his wife's as 79.

``Four months,'' Mr. Griffin replies, beaming. ``Before that I was married 58 years.'' Later he explains that he met his new bride when she enrolled in the exercise class he conducted.

Not all contestants have as much to be happy about. Earl Emmons, another judge, tells of watching a tear well up in a woman's eye as she explained that her husband was in the hospital.

``It's hard, but I'm doing the best I can,'' she told Mr. Emmons, smiling bravely.

``When I asked what they enjoy most about life,'' Emmons reports, ``a lot of people said `each other' or `my family' or `I'm thankful for my health.''' He calls these ``responses from the heart.''

``Some of these people really laugh tragedy in the face,'' adds Janeche Petrou, the third judge.

Finally, the scores of the 84 contestants are tabulated. Anne Sessums, manager of public relations, awards Bob Blackwood and Emily Marino the titles of ``Mr. and Ms. Smile 1987.''

Leonard Griffin, the 94-year-old newlywed, comes in second in the men's category. Grace Gillette, with the refrigerator full of nail polish and pantyhose, places third in the women's.

There are banners and prizes, cheers and thanks - and, just to be realistic, some sober losers, like the couple in Bermuda shorts who rushed to the judges' table too late. Upon learning he would have to save his smile until 1988, the husband suddenly became a prime candidate for a frown contest. Then he shrugged his shoulders and said, without the hint of a smile: ``Well, you just missed a winner.''