It was a ball-dominated day again, as after Robin Morris wiped out the Rest tail to finish with six for 69, the defending champions hit back with India seamer Zaheer Khan claiming three for 46 and Shib Shankar Paul grabbing three for 43.
At stumps on second day, Rest were 84 for two with Aaakash Chopra on 26 and skipper Dinesh Mongia on two.
It was a pathetic display by Mumbai as after dismissing the last four Rest wickets for only nine runs, they still ended with a first innings deficit of 116 runs. It dented their hopes of avenging last year's defeat in Chennai where Rest overhauled a 300-plus target.
Mumbai also had to cope with the loss of Munaf Patel who was ruled out of action for at least six to eight weeks following a shoulder fracture he suffered while bowling on Thursday.
Their first innings failure, however, had more to do with themselves than the pitch which was hard and offered predictable bounce.
Except for Ramesh Powar, who played a typically defiant innings of 55 that came off 86 balls with the help of eight fours, rest of the batsmen were guilty of poor shot selection.
Wasim Jaffer fended at a raising delivery outside the off before Bhavin Thakkar was trapped plumb in front.
Paul was the bowler on both the occasions.
Zaheer, hoping to prove his fitness and form ahead of the Test series against Australia, struggled to find success in his first spell but got his break in the second spell after changing ends.
Amol Muzumdar was unhappy when ICC Elite umpire A V Jayaprakash ruled him caught behind but that brought a new spring to Zaheer's steps and the left-arm speedster began to bowl with more vigour thereafter.
In between, Vinayak Mane was rapped on the pads by Joginder Sharma and Vinod Kambli, after a promising start, returned a simple catch to Murali Kartik.
Captain Sairaj Bahutule became Paul's third victim before Zaheer returned for his third spell to dismiss Morris and Vinayak Samant.
The batsmen's flop show undid the good work by Morris in the morning he grabbed the remaining four Rest wickets and bundle them out for 314.