After winning their first match in Australia on Tuesday when they beat New Zealand, England took renewed confidence into their second match triangular series against the unbeaten home side.
But led by a resurgent Glenn McGrath, some brilliant catching by Brad Hodge and aided by a comical run-out of Ian Bell, Australia bowled England out after just 42 overs on Friday.
The tourists started promisingly, with 34-year-old debutant Mal Loye, called up from provincial cricket in New Zealand to replace injured skipper Michael Vaughan, looking at home immediately.
He took on Brett Lee in the paceman's third over, playing an audacious slog sweep for six and following it up two balls later with a pull shot to the boundary for four.
Although Andrew Strauss struggled throughout his innings, the English were scoring at five runs an over after the first 10 overs.
Loye, looking very much the senior partner rather than a nervous newcomer, greeted McGrath's first two balls with boundaries, the first a pull shot and the second his trademark slog sweep.
But soon after he was caught in two minds over whether to play or leave and was caught at first slip by Matthew Hayden off the bowling of Nathan Bracken to have the English at 52 for one.
Australia, who rested captain Ricky Ponting, missed none of the skipper's brilliant fielding when Strauss pulled a short ball to square leg only to see Ponting's replacement, Brad Hodge, dive to his left and take a spectacular one-handed catch and dismiss the English opener for 18.
Ed Joyce joined Ian Bell at the crease and the pair put on 14 before England lost three wickets for just one run.
McGrath had Joyce caught behind from the last ball of the 17th over and Paul Collingwood was out the same way from in the 19th, but in the over in between Collingwood and Bell were involved in a farcical run out.
Bell chopped a ball to the gully which Cameron White parried behind him. Collingwood called him through but both players hesitated mid-pitch.
Bell stuttered back and forth, then both players began running towards the bowler's end before Bell stopped and turned to see White's under-arm throw trickling into the stumps.
Stand-in skipper Andrew Flintoff made 27 before getting out from a splendid catch by Hodge, running 20 metres to his left at deep mid-wicket and diving forward to take the ball millimetres from the ground.
With England in deep trouble at 118 for seven, James Dalrymple made a last-ditch 31 before becoming the final man out, caught in the deep off White, as Australia completed an embarrassing rout.