Britons Danielle King, Laura Trott and Joanna Rowsell emerged triumphant against the hosts in a battle royale for the women's team pursuit title in an event where the world mark was smashed three times.
So far, Britain have won two out of four of the world titles in the categories to be contested at the Olympics, with Australia and Germany taking one apiece. Another six Olympic category events remain.
Australia's Annette Edmondson, Melissa Hoskins and Josephine Tomic started the flurry of record breaking by beating Britain's world best in the qualifying round only for King, Trott and Rowsell to wrest it back minutes later.
With the packed terraces roaring, the British trio powered away in the last laps of the evening session's final to clock three minutes 15.720 seconds, shaving more than a second off their short-lived record.
The stunning ride secured their second straight title and sounded an ominous warning ahead of the London Games.
"I'm absolutely over the moon," said an ecstatic Rowsell, who won back-to-back team pursuit titles in 2008-09.
"To see the world record broken before our (qualifying) ride is always quite tough; we saw that happen to the team sprint girls yesterday.
"It was great to go into the final (as) fastest qualifiers and we knew we had more in the tank.
"I can't believe I'm world champion again - it's been three years. I so badly wanted that rainbow jersey back," she added.
Despite finishing more that a second behind, the Australian trio were thrilled by their silver medal, having ridden together only a handful of times.
"Everyone's just going to be working harder and getting faster but this is just the motivation we needed, to be right back up there," said 22-year-old Tomic, who won the 2010 title at Copenhagen.
Canada edged New Zealand for the bronze medal.
Australia's rivalry with Britain is set to reach a crescendo on Friday after world champion Anna Meares and Olympic gold medallist Victoria Pendleton set up a mouthwatering match-up in the semi-finals of the women's sprint.
Australian Meares fired a warning shot at her rival by shredding the 200 metres time trial world record in the first qualifying session of the event at Hisense Arena.
Meares and Kaarle McCulloch suffered a stinging defeat to Germany in Wednesday's team sprint final to dash their bid for a fourth consecutive world title, but the 28-year-old put the disappointment behind her with a scorching ride of 10.782 seconds in the time trial.
That eclipsed the record of 10.793 set by Simona Krupeckaite of Lithuania in Moscow in 2010.
"We really didn't expect to see that," Cycling Australia's national performance director Kevin Tabotta told Reuters. "It just shows she's in the form of her life at the moment."
Meares had little trouble disposing of China's Olympic bronze medallist Guo Shuang in their quarter-final, while Pendleton cruised into the last four after dumping out France's Virginie Cueff.
Lyubov Shulika will contest the other semi-final against Krupeckaite.
Seven world records in four events have been broken at the Melbourne velodrome.
On the opening day, Britain's men's pursuit team improved on their best from the 2008 Beijing Games in winning the title while Germany's women set a team sprint world record in qualifying and then bettered it to upset Australia in the final.
In Thursday's non-Olympic events, Germany's Stefan Nimke won his third title in the past four years in the men's one kilometre time trial. France's Michael D'Almeida took silver and bronze went to Simon Van Velthooven of New Zealand.
Russia's Anastasia Chulkova won the women's points title ahead of Jasmin Glaesser of Canada and Ireland's Caroline Ryan was third.
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