England's first innings ended on 332, then Stuart Broad claimed 5-37 to rout the Australians inside a day.
By stumps, England had slumped to 58-3 but its lead was growing more ominous for the Ashes-holding Australians on an unusually bowler-friendly pitch.
"It was a fantastic experience," Broad said. "We got together this morning and talked about how we were going to bowl and what fields we were going to set. Our plans got the rewards.
"It was disappointing to lose those late wickets but we take the positives out of that. It shows this is not an easy pitch to score runs on. We are still in a fantastic position but tomorrow is a massive day and we need to get our heads down and put the Aussies under pressure."
Australia was feeling that pressure after blowing a 73-run opening stand.
"I thought Stuart Broad bowled well," Australia's Simon Katich said. "His spell cracked the game right open. He changed his pace well. We needed a partnership to stop England's momentum but couldn't manage it.
"It will take a huge effort to get out of this. Those three wickets at the end were better than none but we know it's going to be tough, when you bat last in a test match you expect that. You never know the pitch might slow up. Who knows what's around the corner?"
After reaching 27-0 in its second innings, England was quickly reduced to 39-3.
Alastair Cook was out for 9, caught at slip off spinner Marcus North, and Ian Bell and Paul Collingwood were both caught by short-leg fielder Katich off Mitchell Johnson for 4 and 1 respectively.
Captain Andrew Strauss was 32 not out with debutant Jonathan Trott unbeaten on 8.
The six-week series turned in the post-lunch session when Australia, from 61-0 at lunch, lost eight wickets, and eventually saw all 10 wickets fall for 87 runs in 30 overs and 138 minutes.
Broad sparked the collapse by grabbing the first four Australia wickets in a 21-ball burst in which he conceded eight runs, extracting swing and seam.
He went on to record his third five-wicket test haul after taking best figures of 6-91 in the last match that Australia won by an innings to level the series at 1-1.
Offspinner Graeme Swann exploited a dry, dusty pitch that took spin from the first day. Australia opted to omit its leading spin bowler Nathan Hauritz.
Australia seemed well placed at lunch, but collapsed following a 50-minute rain delay after the interval.
Opener Shane Watson, fortunate to survive an lbw appeal against Andrew Flintoff when on 4, was eventually dismissed lbw by Broad for 34 at 73-1 after umpire Asad Rauf's earlier error.
Captain Ricky Ponting received his friendliest reception of the series, with only a hint of the booing that marked his arrival to the crease in the previous three matches. The jeers were instead replaced with prolonged applause.
Ponting's first runs came off an inside edge for four off Broad, who then bowled him off the inside edge next over for 8 by beating the batsman with an off-cutter that bounced into the ground and onto the off stump.
Michael Hussey, averaging 25 in the series, was out lbw for 0 from a halfhearted push in Broad's next over. Replays suggested the ball would have clipped the top of off stump, and Australia was 89-3.
Michael Clarke came in as the highest-scoring batsman in the series with an average of 89, but he scored 3 from seven balls before playing an uppish cover drive to Broad and was caught by Trott at short cover to make it 93-4.
North was the next to depart, unluckily given out lbw for 8 by Rauf despite getting an inside edge on his pad. He offered a rueful laugh at the decision.
Opener and topscorer Katich was the last of the top six to fall when his 170-minute innings of 50 was ended by an inside edge on to his pad to short-leg fielder Cook at 109-6.
Two runs later, No. 7 Brad Haddin was bowled by Broad's perfectly shaped out-swinger.
Johnson was out five minutes before tea for 11 when he edged Swann to wicketkeeper Matt Prior. Swann played his part in the chaos with a spell of 3-11 from 27 balls.
After tea, Stuart Clark was given out by Rauf for an apparent inside edge on to his pad off Swann even though the ball missed his bat by inches (centimeters). Andrew Flintoff, playing his final test, bowled Ben Hilfenhaus for the last wicket.
England resumed on 307-8 and lost James Anderson lbw to Hilfenhaus on the ninth delivery of the day, out for 0 for the first time since his test debut six years ago. Anderson had gone 54 innings without a duck.
Broad was the last man out, caught by Ponting at second slip off Hilfenhaus for 37, attempting his sixth boundary. Steve Harmison was 12 not out, courtesy of three fours.
Siddle finished with 4-75. Hilfenhaus had 3-71.
