New Zealand cleaned out the top four Australian batsmen on Sunday to leave the tourists on 77/4 and facing an uphill task in their chase of 279 to win the second Test in Christchurch.
"Our backs are against the wall. New Zealand are on a roll," Australia spinner Nathan Lyon said.
The hosts set a demanding target for an Australian side struggling for runs on a ground where the highest successful fourth innings is 285/8, set by New Zealand against Sri Lanka last year.
The home camp was elated.
"It's been a great day for us," declared opener Tom Latham, who contributed 73 in New Zealand's second innings of 372.
"After the first two innings we were behind the game a little bit and to bring it back to parity and then to maybe get our noses in front has been pretty pleasing."
Australian batsmen Steve Smith, Marnus Labuschagne, Usman Khawaja and Cameron Green were all swiftly sent back to the Hagley Oval pavilion by New Zealand's seamers.
Matt Henry, rated by Lyon as the bowler of the series, had figures of 2/37 with debutant Ben Sears on 2/22. Australia still need 202 runs.
At the close of play on day three, Mitchell Marsh was not-out 27 with Travis Head unbeaten on 17.
With two days remaining and no rain forecast, a draw is out of the equation as New Zealand battle for their first win over Australia since 2011.
The tourists are looking to sweep the series after dominating the first Test.
With the pitch flattening out and not providing as much movement as it did over the first two days, New Zealand were well placed when they went to tea at 345-6 and were eyeing an imposing 300-plus target.
But momentum swung back Australia's way as the New Zealand tail added just 27 and the last three wickets contributed only one run.
At the top of the order, there were half-centuries from Tom Latham, Kane Williamson, Rachin Ravindra and Daryl Mitchell, but no one was able to push on to three figures.
New Zealand resumed the day at 134-2 and quickly lost Latham, who added eight to his overnight 65 before he was caught behind off Pat Cummins.
Ravindra and Mitchell calmly put on 123 for the fourth wicket, forcing Cummins to use seven bowlers before Josh Hazlewood made the breakthrough, snagging Mitchell caught behind for 58.
Three overs later Ravindra on 82 feathered a Cummins delivery to give wicketkeeper Alex Carey his ninth catch in the Test.
The ball was moving away and it was an out-of-character shot from Ravindra, who had displayed considerable patience until then in his 153-ball innings.
Glenn Phillips and Henry added 16 apiece before Nathan Lyon removed Scott Kuggeleijn for 44 to end the innings.
Cummins was the most successful bowler with 4/62 while Lyon took 3/49.
Any momentum Australia gained quickly evaporated in the face of a torrid onslaught from the New Zealand attack in a spirited 24 overs before stumps.
Smith again went cheaply, trapped in front by Henry for nine, with the quick bowler also getting Khawaja out, caught one-handed by Tim Southee at third slip for 11.
Sears had little time to fret over having Labuschagne dropped in the slips on six, as he completed the job himself with a fine caught-and-bowled two balls later.
He backed that up by bowling first-Test century-maker Green for five.
AFP