Australia 342 for 9 (Finch 135, Maxwell 66, Bailey 55, Finn 5-71) beat England 231 (Taylor 98*, Marsh 5-33) by 111 runs
In front of 84,336 fans, England recorded their second-heaviest World Cup loss in terms of runs as Aaron Finch pummelled his way to 135 and Mitchell Marsh took a 5-for to give Australia a routine victory.
England had Australia in trouble at various points during the innings but couldn't keep the pressure on. On three occasions, an England bowler had taken two-wickets in two-balls; Steven Finn converted his two-in-two into a hat-trick on the last three balls of the Australian innings.
Australia had made an explosive start to the game, racing to 57 after seven overs thanks to some poor bowling and fielding from England; including Chris Woakes dropping Finch on zero.
Stuart Broad, bowling with re-discovered pace then bowled David Warner for 22, had Shane Watson caught behind very next ball only for Steve Smith to block the hat-trick ball.
Smith didn't last long, however, as he chopped on to Chris Woakes in his second over to leave Australia stuttering.
During the recent tri-series final, England had Australia 60-4 and they recovered to post 278. Here, they were 70-3 and the momentum was with England as struggling captain George Bailey came to the middle.
26 overs, 146 runs and a lot of frustration passed before England finally had another wicket as Eoin Morgan hit the stumps from cover with Finch not in the frame. Finch had walked off to rapturous applause but walked off knowing there was potential records to be had had he stayed at the crease.
Bailey followed shortly thereafter, bowled by Steve Finn via the inside-edge of his bat for a much-needed 55. The innings will give Australia a selection dilemma with the imminent return of captain Michael Clarke.
The hitting power didn't stop as Mitchell Marsh (25) and Brad Haddin (31 from 14b) took the game further from England's reach alongside Glenn Maxwell who hit eleven boundaries in his 40-ball 66.
The innings ended on a positive note for England as Steve Finn completed a World Cup hat-trick and five-for with the final three balls of the innings.
Haddin was first to go sending a thick outside edge down to Stuart Broad at third man who completed the catch. Joe Root then took a sensational low-diving catch at long-off to dismiss Maxwell and finally, Mitchell Johnson slapped a ball directly to mid-off.
The total of 342 was Australia's highest at the MCG and always seemed too many runs for an England side that tested a new batting line-up with Gary Ballance replacing Ravi Bopara in the side and moving to number three with James Taylor moving to number 6.
Mitchell Starc quickly removed Moeen Ali for ten, mis-timing a pull to mid-on before another Mitchell tore through England's middle-order; a sentence all to common for an England fan to read.
However, this wasn't the searing pace of Mitchell Johnson. Instead, the all-rounder Mitchell Marsh, on World cup debut, secured his maiden ODI five-wicket haul and ripped the heart out the England side.
Ballance was first to be dismissed by Marsh as he flicked straight to Finch at mid-wicket for ten. Ian Bell, who looked set on 36 then slogged a length ball to Mitchell Starc on the mid-wicket boundary to give Marsh his second. He then had Joe Root caught hooking via a top-edge for five to expose England's struggling captain Eoin Morgan.
Morgan, in a serious rut form-wise only managed six deliveries before edging a slower-ball bouncer behind to Haddin to give Marsh his fourth and on the verge of a five-for.
He only had to wait four overs for the milestone as Jos Buttler, England's new vice-captain, drove to short-cover only to find Australia's superman Steve Smith leaping to his left and plucking the ball from thin air.
Despite all the carnage, James Taylor compiled a brilliantly composed 90-ball 98 that included eleven fours and two sixes that deserved better than a loss.
Taylor failed to get any support during the innings with only Chris Woakes - 37 from 42 - supporting Taylor for any length of time.
Taylor was denied a fabulous first ODI hundred in a shambolic ending. Given out LBW, he subsequently reviewed the decision which showed that the ball was missing leg-stump. However, James Anderson had been run-out trying to scramble a leg-bye as Taylor was given out LBW.
The ICC later confirmed that the decision shouldn't have been out but that will be of little consolation to England as they were well-and-truly out-played throughout.
England next play New Zealand in Wellington on Friday whilst Australia play Bangladesh at the Gabba on Saturday.