England's seamers scythed through Australia's top order before lunch at the Melbourne Cricket Ground, then rattled through their last six wickets for the loss of only 40 runs before tea to stun the crowd of more than 84,000.
England openers Andrew Strauss and Alastair Cook rubbed salt in the hosts’ wounds by surviving more than three hours to stumps, profiting from sunny afternoon conditions that tamed a pitch that earlier proved a handful for Australia's batsmen.
Strauss was on 64 and Cook 80 at stumps, raising England's hopes of taking the Ashes home for the first time in 24 years. Australia's paltry total eclipsed their previous lowest of 104 against their opponents at the MCG in the inaugural match of England's first Test tour of Australia in 1876-77. The hosts won that Test by 45 runs.
Pacemen Chris Tremlett and James Anderson each finished with four wickets, while Tim Bresnan, who replaced Steve Finn in the side, took two for 25.
England captain Strauss won the toss and sent Australia into bat on a moist, grassy pitch that offered swing and varying bounce from the first ball on an overcast morning.