Australia rode David Warner's belligerent 127 to chase down a modest target and beat England by three wickets with 10 overs to spare in the first match of the tri-series, also involving India, on Friday.
England's new One-Day International captain Eoin Morgan roared back into form with a scintillating 121 but his team was dismissed for 234 inside 48 overs against some impressive bowling by Mitchel Starc (4-42) and James Faulkner (3-47).
Australia lost opener Aaron Finch early in their chase and all-rounder Shane Watson did not last long either, but Warner maintained his rich vein of form to hit his third ODI century, which included 18 fours, to take them near the target.
Chris Woakes (4-40) eventually ended Warner's 115-ball knock but could not denyAustralia, who lost a flurry of wickets before reaching the target in 39.5 overs, a victory that earned a bonus point.
Australia's win was set up by their bowlers, especially left-arm paceman Starc, who claimed two wickets with his first three deliveries and another brace with his final two.
He will be on a hat-trick in his next match, most likely against India on Sunday.
Morgan's seventh ODI century, studded with three sixes and 11 boundaries, stood out in England's meek capitulation in 47.5 overs against Australia's hostile bowlers at the Sydney Cricket Ground.
Morgan's decision to bat first backfired as England slumped to 12-3 inside four overs and had their top half blown away by the 16th over.
Starc jolted Ian Bell's bid to nail down the opener's slot for next month's World Cup by trapping him leg before with the first delivery of the match and dismissed James Taylor in similar fashion with his third.
Joe Root fell cheaply too while opener Moeen Ali, watching as wickets tumbled at the other end, returned to the pavilion after scoring a brisk 22.
With England reeling at 69-5, Morgan and Josh Buttler (28) arrested the slide with a 67-run stand for the sixth wicket with the England captain unfurling his trademark reverse sweeps and stepping out frequently against the spinners.
Morgan, who had been woefully out of form, charged down the track to hit left-arm spinner Xavier Doherty for a six to bring up his fifty and a cover driven four off Faulkner brought up his century before he fell to Starc.
