Stumps Australia 81 for 1 (Labuschagne 37*, Khawaja 35*, Hasan 1-14) and 556 for 9 dec (Khawaja 160, Carey 93) lead Pakistan 148 (Babar 36, Starc 3-29, Swepson 2-32) by 489 runs
Captain Pat Cummins resisted enforcing the follow-on after rampant quick Mitchell Starc delivered a reverse swing masterclass against a hapless Pakistan batting order to power Australia into an almost impregnable position in the second Test.
In their second innings, the visitors reached stumps on day three at 81 for 1 with an overall lead of 489. Marnus Labuschagne was 37* and Usman Khawaja unbeaten on 35 as Australia capped an almost flawless day's play to be well poised to draw first blood in this historic series, the first played between the teams in Pakistan since 1998.
Cummins raised some eyebrows when he opted to bat again even though Australia had a massive first-innings lead of 408 after routing Pakistan for 148. It was Pakistan's largest ever first-innings deficit, but Australia preferred sticking with their well-worn strategy of grinding the hosts into the ground as Cummins' earlier decision to bat into day three appeared a masterstroke.
Even though Australia's bowlers had a relatively light workload, Cummins might have been influenced by oppressive conditions in Karachi, where the temperature again hovered in the mid-30s as he sought to give his bowlers a rest.
It provided a chance for Australia's batters to get an extra hit under little pressure, but opener David Warner's relatively lean start to the series continued when he fell for 7. Khawaja, who has hit three tons in six innings since his Test recall in January, received a life just before stumps when he was dropped by wicketkeeper Mohammad Rizwan on 30, while Labuschagne played fluently, aiming to erase the memories of being run-out for a duck in the first innings.
They toyed with Pakistan's flagging bowlers, who probably still couldn't quite believe they had to return to the field so soon. Australia will look to continue breaking Pakistan's back before an inevitable declaration on day four when they will unleash their bowlers who relished a deteriorating pitch to leave behind the ghosts of Rawalpindi.
With plenty of runs on the board against weary opponents, Australia's attack bounced back brilliantly after taking just four wickets in 217.1 overs in the first Test amid a stale draw. In response to Australia's marathon first innings of 556 for 9 declared, a weary Pakistan crumbled against relentless quicks Cummins and Starc, who conjured spectacular reverse-swing as he hit speeds of near 150kph.
Justifying his selection over Josh Hazlewood, Starc was rewarded for his rapid bowling with the wicket of first-Test centurion Azhar Ali, who edged a full and wide delivery to Cameron Green at second slip. He then had Fawad Alam lbw for a golden duck with a searing yorker in the first delivery faced by the batter in the series.
The red-hot Starc, who went wicketless in Rawalpindi, almost completed a hat-trick when he beat Rizwan with a pearler of a good length delivery that swerved past the edge. But Cummins removed Rizwan shortly after with a gem, and was unlucky to finish with a solitary wicket.
Debutant legspinner Mitchell Swepson wasn't greatly required but claimed his maiden Test wicket when he dismissed captain Babar Azam who miscued a well-flighted legbreak.
The 28-year-old, who is Australia's first specialist Test legspinner since Bryce McGain in 2009, added another to finish with 2 for 32, but his most important contribution was running out opener Abdullah Shafique with a brilliant direct hit to start Pakistan's rot.
All of Australia's frontline bowlers shared in the spoils, with Green claiming his first Test wicket overseas when he trapped Faheem Ashraf lbw for 4. Even though they faced menacing bowling, Pakistan contributed to their demise with two disastrous run -outs and several reckless strokes, including in-form opener Imam-ul-Haq holing out on 20 straight after lunch in a tame dismissal against spinner Nathan Lyon.
Babar played a lone hand as he batted through the type of carnage reminiscent of Pakistan's woes in Australia during the past two decades. Underlining their batting horror show, tailenders Nauman Ali and Shaheen Shah Afridi's tenth wicket stand of 30 was Pakistan's highest partnership of a feeble innings.
Australia dominated from the start of day three, with Cummins and Swepson adding a quickfire half-century partnership for the last wicket to frustrate Pakistan further. Cummins finally declared after 189 overs in their highest number of overs in an innings in Asia since 2000.
After Cummins won a crucial toss, Australia made the most of batting-friendly conditions in an innings dominated by Khawaja's brilliant 160 off 369 balls in the city his family hails from, while Alex Carey with 93 and Steven Smith with 72 notched half-centuries.
Khawaja may have the chance on day four to complete twin centuries in a Test for the second time in four matches before Australia's bowlers look to put the final nail in Pakistan's coffin.