Nathan Lyon has snagged four wickets for NSW at the SCG, where Victoria have reached 5-87 at tea as they pursue a target of 141 on a tense third day of the Sheffield Shield clash.
Lyon snared 6-21 from 16 overs during Victoria's first innings, helping inflict a stunning collapse of 8-48.
The offspinner has now grabbed a maiden 10-wicket match haul for NSW, exhibiting potent form in his first red-ball game after what he termed an emotional and exhausting end to Australia's Test series against India.
The Blues resumed at 1-22 on Friday, lost 5-18 and were all out for 175 at the end of an eventful morning session.
Lyon scored 21 as the Blues' nightwatchman before Sean Abbott ensured the match continued to move along in frenetic fashion.
Abbott crashed six sixes during a quickfire 73 from 75 balls, including 23 runs from one Scott Boland over, to top score in the hosts' second innings.
As Victoria came in to bat, Lyon shared the new ball with Mitchell Starc.
The tweaker's first delivery was smashed into the stands by Nic Maddinson, but Lyon settled and created the all-important first breakthrough when Marcus Harris (14) was caught behind in the eighth over.
Moises Henriques dropped a leg-slip catch offered by Matt Short as Lyon continued to build pressure, removing Peter Handscomb (4), Short (17) and then Maddinson (44) as Victoria slipped to 4-84.
Josh Hazlewood ensured Seb Gotch's stint at the crease was brief, trapping him lbw on two to fuel NSW's hopes of what would be a remarkable victory.
Earlier, Will Sutherland had claimed the prized scalp of Steve Smith for 13, with the batsman struggling to hide his disbelief after being judged to have edged the teasing delivery.
Smith, who earlier survived a wholehearted lbw shout from Boland, barely stopped shaking his head as he trudged off.
The superstar's dismissal came the morning after his Indian Premier League pay was trimmed by approximately $2 million, having been picked up by Ricky Ponting's Delhi Capitals for $400,000 in the auction.
Former Test players Kurtis Patterson and Peter Nevill were both out for ducks during the NSW collapse, while Henriques scored three.
Abbott, whose half-century came in just 77 minutes, Mitchell Starc (13) and Trent Copeland (20) dragged their side past 100, which looked highly unlikely when NSW were 7-68.
Hazlewood (0) faced just five deliveries in an entertaining final-wicket stand of 56 runs.
