Dismissed late on the opening day for just 244, the home side rebounded to secure a 29-run first innings lead and bowl England out for 215 in the last over before tea on Friday.
Kevin Pietersen top scored for the English with 70, while tailenders Steve Harmison and Monty Panesar put on the biggest partnership of the innings, adding 40 potentially crucial runs for the last wicket.
The English looked set to concede a significant first innings deficit at 128 for seven, but the efforts of Pietersen, Harmison (23) and Panesar (16 not out) frustrated the Australians and kept the tourists in the match.
All five of the Australian bowlers enjoyed success, but Stuart Clark was the pick of the group with 3-49.
At times Clark was almost unplayable and he beat the bat countless times, while the seam bowling of Andrew Symonds netted two important middle order wickets at a cost of just eight runs.
The Australian fightback on the second day revived their hopes of regaining the Ashes here, as they already lead the five-Test series 2-0.
It was another disappointing batting effort by the English, who started the day at 51 for two and were looking to consolidate after the bowling heroics of Panesar and Harmison on Thursday.
However, as on the final day in Adelaide they collapsed early, this time to a combination of lively bowling on a bouncy pitch and poor shot selection.
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 was caught in gully by Matthew Hayden from the bowling of Glenn McGrath (2-48) for 10.
Wickets then fell regularly as the English struggled to put together a significant partnership.
Opener Andrew Strauss was striking the ball sweetly, but on 42 he aimed a drive at the probing Clark and was given out caught behind.
Replays seemed to indicate the ball had just missed the outside edge of the bat.
England skipper Andrew Flintoff made just 13 before falling to Symonds and struggling wicketkeeper Geraint Jones made his third successive duck of the tour.
Pietersen held the England innings together and started to strike some lusty blows, but holed out to Symonds at long-off from the bowling of Brett Lee.
Australia 1st innings: 244 (M. Hussey 74 not out, M. Panesar 5-92, S. Harmison 4-48)
England 1st innings: 215 (A. Strauss c Gilchrist b Clark 42, A. Cook c Langer b McGrath 15, K. Pietersen c Symonds b Lee 70, S. Harmison c Lee b Clark 23, M. Panesar not out 16)
Fall of wkts: 1-36, 2-37, 3-55, 4-82, 5-107, 6-114, 7-128, 8-155, 9-175
Bowling: Lee 18-1-69-2 (6nb), McGrath 18-5-48-2 (4nb), Clark 15.1-3-49-3 (1w), Warne 9-0-41-1, Symonds 4-1-8-2