The productive session, leaving England still trailing by 122 runs, revived Australia's hopes of regaining the Ashes at the WACA Ground in Perth, as they already lead the five-Test series 2-0.
Kevin Pietersen was not out on 27 and Sajid Mahmood with him on six.
It was another highly disappointing batting effort for England, who were looking to consolidate after the bowling heroics of Monty Panesar and Steve Harmison left Australia dismissed on the opening day for just 244.
But they fell victims to a combination of lively bowling on a bouncy pitch and poor shot selection, with star Aussie leg spinner Shane Warne not used in the morning session.
Having claimed two wickets during an uncomfortable period for the England batsmen just before stumps on the first day, it took the Australians just four overs to strike again.
Paul Collingwood, unmovable during the second Test batting collapse, paid the price for a loose stroke and fell to Glenn McGrath (2-35) for 10.
Collingwood tried to force the ball off the back foot and slashed a catch straight to Matthew Hayden at gully.
Kevin Pietersen then joined Andrew Strauss for what loomed as a pivotal partnership.
Strauss was striking the ball sweetly, but on 42 he aimed a drive at the probing Stuart Clark and the Australians went up for a catch behind.
Whether it was frustration at Rudi Koertzen's decision to raise the finger or at another good start squandered, Strauss looked an unhappy player as he left the field.
Replays seemed to indicate the ball had just missed the outside edge of the bat.
England skipper Andrew Flintoff then teamed with Pietersen for another important stand but the pair added just 25 before Flintoff fell to the seam bowling of Andrew Symonds for 13.
Flintoff did not look in great touch and he edged a catch to first slip, where Warne took the ball safely low down to give a delighted Symonds (2-8) his first wicket.
Symonds struck again when he had the struggling Geraint Jones caught at backward point by Justin Langer for a duck.
It was the third duck in a row for Jones, who failed to score in the one-day game at Lilac Hill and in the tour match against Western Australia.
Australia 1st innings: 244 (M. Hussey 74 not out; M. Panesar 5-92, S. Harmison 4-48)
England 1st innings: 122 for 6 wkts at lunch (A. Strauss c Gilchrist b Clark 42, A. Cook c Langer b McGrath 15, P. Collingwood c Hayden b McGrath 11, K. Pietersen not out 27, A. Flintoff c Warne b Symonds 13)
Fall of wkts: 1-36, 2-37, 3-55, 4-82, 5-107, 6-114
Bowling: Lee 12-1-47-1 (5nb), McGrath 12-4-35-2 (2nb), Clark 9-3-24-1 (1w), Warne 2-0-8-0, Symonds 4-1-8-2