。
She charmed every one of us with her smile.
Literal
She [topic-は] all-of-us [object-を] smile [with-で] captivated.
魅了する ('to captivate, to charm, to fascinate') is a Sino-Japanese compound (魅 'charm' + 了 'completion') belonging to a slightly elevated register — the kind of word you'd find in a novel or a film review more than a casual chat. The instrumental で here marks the means: 微笑で = 'by means of [her] smile.' 微笑 (びしょう, 'a slight smile') is the noun form; you'll also see 微笑む (ほほえむ) as the verb. The combination evokes a graceful, almost cinematic moment.