The beleaguered tourists, with the Ashes already lost, boosted their chances of averting a 5-0 series clean sweep with a rare rewarding day in the field as they defended what had appeared to be a below-par first innings total of 255.
But disciplined bowling and fielding stifled Australia's scoring and with it the wickets tumbled to put the home side under pressure on a slow-paced MCG pitch.
At the close, Australia were 164 for nine, trailing England by 91 runs with Brad Haddin on an unbeaten 43.
"Days like that have been few and far between on this trip, and we're really hungry to get something out of this tour and I think we showed that today," said England paceman James Anderson, who took the important wickets of Chris Rogers, Michael Clarke and George Bailey.
"I thought we fielded pretty well all day. We dived around a lot, we chased everything. I thought Alastair Cook set really good fields, we bowled to those fields and it was a really complete performance."
England were restricted in their first-innings by a hostile spell from Mitchell Johnson, but the Australians also laboured for runs with veteran opener Chris Rogers crawling to his third half-century of the series and wicket-keeper Haddin again defying England.
Cook's tactics of drying up the runs reaped rewards with the cheap dismissals of key batsmen David Warner (9), Shane Watson (10), Clarke (10), Steve Smith (19) and Bailey (0).
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