After skittling Australia for 152 in just 45.2 overs, England fared significantly worse, rolled for 110 in 29.5 overs 12 minutes before stumps on Boxing Day.
Victorian hero Scott Boland, Australia's No.11, was dropped off the fifth ball of the only over as a nightwatchman, then hit the final delivery of the day to the boundary as the hosts reached 0-4 in their second innings.
A pitch with 10mm of grass proved a dream for fast bowlers as 20 wickets tumbled - the most on the first day at the MCG since 25 fell in 1902.
It is also the most wickets on any day of a Test in Australia since 1951, when 22 were taken on the first day of the match against West Indies at Adelaide Oval.
The combined score in Melbourne on Friday was 20-266, getting close to the 24 wickets that fell over five days during the 2017 Ashes Test at the MCG.
Australia declined to pick a frontline spinner in a home red-ball Test for the first time in almost 14 years in a sign of the fast-bowling carnage that was about to come.
All 75 overs sent down by both teams on Friday were from eight quick bowlers
Even esteemed former pacemen Brett Lee and Stuart Broad criticised the pitch for being too much in the quicks' favour.
England paceman Josh Tongue starred with 5-45 for the third five-wicket haul of his Test career as the demoralised tourists gained a boost following captain Ben Stokes' decision to bowl first.
But the joy was short-lived for England, who collapsed to 4-16 in only eight overs, with star batter Joe Root one of the victims.
The only partnerships of note during the whole day came from Australia's Michael Neser and Cameron Green and England's Harry Brook and Stokes.
Brook charged Australia quick Mitchell Starc (2-23) from the first ball he faced and continued counter-attacking.
But that approach was never going to be sustainable, and he made 41 from 34 balls before being trapped lbw by Boland (3-30).
From 4-66, England were obliterated again as Neser and Boland ripped through the middle and lower order to put Australia in a commanding position for their goal of a 4-0 series lead.
The first Test of the summer in Perth lasted just two days, leading to a significant financial loss for Cricket Australia.
But with this MCG pitch behaving, arguably, worse for batters than that Perth Stadium surface, the match is heading for another early finish.
Neser, dropped for the Adelaide Test after a five-wicket haul in Brisbane, responded with a team-high 35 and 4-45.
"A bit of a whirlwind," Neser said of the first red-ball Test of his career.
"A lot of wickers fell, but going into it you knew it was going to nip around with the amount of grass there."
Jhye Richardson and Neser joined Starc and Boland in a four-man pace attack, with captain Pat Cummins and Nathan Lyon sidelined through injury.
But Richardson - in his first Test for more than four years - was required to bowl just four overs, as the in-form Starc, Boland, Neser and a one-wicket cameo from Green took down England.
Australia crashed to 6-91 just after lunch, but Green and Neser frustrated the bowlers with a 52-run stand.
But Green (17) indecisively took off for a quick single, with Brydon Carse following up his own delivery and hitting the stumps.
The 26-year-old Green has endured a difficult series with the bat, the lowlight being a rash shot to be bowled in Brisbane that placed his spot in the XI under scrutiny.
Starting to recover at 6-143, Australia collapsed again when Green was run out, losing 4-9 to bring an abrupt end to their innings.
Australia had slipped to 4-72 at lunch as Tongue justified Stokes' call to bowl first in the fourth Test.
Tongue claimed the prized wicket of Steve Smith (nine), back after recovering from vertigo symptoms that ruled him out of Adelaide, with a ball that moved back to skittle his stumps.
"He's obviously an amazing player," Tongue said of Smith.
"I've grown up watching him, and getting him out is a very special feeling."
After retaining the Ashes in only 11 days, Australia are trying to continue England's tour of misery by completing a 5-0 whitewash for the first time since 2013-14.
It is the third time in their past five Tests Australia have chosen not to select a spinner, with Lyon dropped for day-night matches in Kingston and Brisbane.
Despite Australia leading 3-0 and having already retained the Ashes, interest in the Boxing Day Test is as strong as ever, with a record crowd of 94,199 at the MCG on Friday.
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