There has been a resurgence of applications focused on Human Activity Recognition (HAR) in smart homes, especially in the field of ambient intelligence and assisted living technologies. However, such applications present numerous significant challenges to any automated analysis system operating in the real world, such as variability, sparsity, and noise in sensor measurements. Although state-of-the-art HAR systems have made considerable strides in addressing some of these challenges, they especially suffer from a practical limitation: they require successful pre-segmentation of continuous sensor data streams before automated recognition, i.e., they assume that an oracle is present during deployment, which is capable of identifying time windows of interest across discrete sensor events. To overcome this limitation, we propose a novel graph-guided neural network approach that performs activity recognition by learning explicit co-firing relationships between sensors. We accomplish this by learning a more expressive graph structure representing the sensor network in a smart home, in a data-driven manner. Our approach maps discrete input sensor measurements to a feature space through the application of attention mechanisms and hierarchical pooling of node embeddings. We demonstrate the effectiveness of our proposed approach by conducting several experiments on CASAS datasets, showing that the resulting graph-guided neural network outperforms the state-of-the-art method for HAR in smart homes across multiple datasets and by large margins. These results are promising because they push HAR for smart homes closer to real-world applications.