With six months to the much-awaited Ashes series in England, 34-year-old McGrath returned to the top of the world Test bowling rankings, less than a year after his cricketing future appeared in jeopardy with injury.
McGrath leapt from third to first on the PricewaterhouseCoopers rankings for the first time in two years after his career-best 8-24 against Pakistan in Perth last Sunday.
Harmison's ranking slipped three places to fourth after a moderate return of 1-142 in England's record-breaking eighth consecutive Test victory against South Africa in Port Elizabeth.
McGrath now has 472 Test wickets and is in line to join teammate Shane Warne, Sri Lankan Muttiah Muralitharan and West Indian Courtney Walsh in the exclusive 500-Test wicket club.
McGrath has dismissed any suggestions of retirement which have followed him since he was sidelined from Tests for almost 12 months following ankle surgery.
McGrath, whose 8-24 was second only to Arthur Mailey's 9-121 against England in 1920-21 as the best in a Test innings by an Australian, wants to play through to the 2007 World Cup.
Muralitharan remains at No.2 on the rankings, even though injury has kept him off the Test field for the past four months.
Pakistan's Shoaib Akhtar moved up one position to third following his match figures of 6-121, the only bright note in Pakistan's abject 491-run defeat by Australia in Perth.
Warne remains in eighth position, while the biggest mover was Australia's third pace bowler Michael Kasprowicz, who climbed 12 places to his highest-ever ranking of No.14 following a match haul of 7-34 at the WACA.