On what looked set to be a good day for batting, England made an impressive start, only to watch it all fall apart after the first session.
Dawid Malan and Joe Root began well for England, putting on a 138-run partnership and showing some signs of intent.
Malan brought up his second half-century of the tour, further underlining his ability to score runs in Australia, and Root followed suit soon after.
Together, the pair scored 123 runs in the first session, as England made it through to the break unscathed.
However, Root's wait for a maiden Test hundred in Australia continued, with Cameron Green getting him caught at slip for 62.
Malan also fell short of three figures once again, slashing a delivery from Mitchell Starc to first slip.
Then, in a mirror image of what happened in their second innings at the Gabba, the departures of Root and Malan signalled an inevitable collapse from 150-2 to 236 all out.
Nathan Lyon removed a frenetic Ollie Pope for five, while Jos Buttler's game went from bad to worse as he fell for a 15-ball duck.
Ben Stokes attempted to dig in while batting with Chris Woakes, but after he fell to Lyon for 24, Stokes started to tee off.
He ended up making 34 off 98 balls, with England ending their innings a mammoth 237 runs behind Australia after getting bowled out for 236.
After opting not to enforce the follow-on, Australia got through to the close of play on 45-1, with David Warner getting run out in horrible fashion.
Here are five talking points from the day's play...
England's positive start
Despite losing both their openers cheaply late on day two, Malan and Root came out prepared to play positively on day three.
The pair looked to score and their approach was in direct contrast to the way Australia approached their innings.
On day one, Australia were content to bat slowly, with David Warner and Marnus Labuschagne more focused on survival than run scoring.
Warner's innings of 95 came much at a much slower strike rate than his career average, while Labuschagne's 103 was the slowest of his six Test centuries in terms of balls faced.
Given the difficulties England had facing the new ball under lights on day two, their attempts to cash in early on came as no surprise.
Speaking on BBC Test Match Special, former Australia captain Ian Chappell said: "There has been a a big difference between the tactics of the teams.
"England have been a lot more proactive. They have been prepared to score runs and play shots earlier in their innings."
Root's pursuit of record continues
The England captain has had a remarkable 2021 with the bat so far and he could yet break the record for the most runs scored in a calendar year.
Root is currently on 1606 runs and moved up to fourth on the list during his first innings in Adelaide, overtaking India great Sachin Tendulkar and former Australia captain Michael Clarke.
He scored 62 on day three and put on an impressive 138-run partnership with Malan.
Root remains 182 runs behind Pakistan's Mohammad Yousuf, who scored 1788 runs in 2006, but he will likely have three more opportunities to bat before the year comes to a close.
Pope's struggles against spin continue
At his best, Pope looks like he could the second coming of Ian Bell but, now more than 20 Tests deep into his international career, the 23-year-old needs to start delivering for England.
Pope has just one Test century to his name and he has made just one score over 35 so far this year.
He has particularly struggled against spin, something which was once viewed as one of his strengths.
Between 2018 and 2020, Pope averaged 43.00 against spin in Test cricket, but that has dropped sharply to 15.60 this year.
Much of that is a result of England's struggles on their tour of India, but Pope has not looked comfortable at all against Lyon in the Ashes.
Lyon has now dismissed him for single figure scores in back-to-back innings, with Pope looking frenetic and unsure of how to play the off-spinner.
"Ollie Pope has completely played into Nathan Lyon's hands," Chappell told BBC Test Match Special. "He's in danger of forfeiting his position in this team."
Buttler's terrible Test continues
It all started so well for Buttler when he took a stunning catch off Stuart Broad to dismiss Marcus Harris.
Since then, however, nothing has gone right for the England wicketkeeper.
He dropped Marnus Labuschagne twice when he had made 21 and 95, before finally keeping hold of a chance when he was on 102. That was promptly overturned when Ollie Robinson was found to have overstepped.
With the bat, Buttler could not get away and was caught at slip off Starc for nought after getting lured into a drive.
Australia's catching sets them apart
England's fragile batting line-up and the debate over the makeup of their bowling attack has dominated much of the discussion about their struggles this series.
However, England's fielding has also been poor, with Root and Malan the only players to have featured in both Tests to have not dropped a catch.
Australia have taken 23 catches in the series so far and dropped just the one, whereas England have put down 11 chances.
