David Warner struck four boundaries in his 25-ball 21 before falling to Mark Wood.
Aaron FInch kept the ball rolling for Australia bringing up a fine half-century.
Ben Stokes struck to remove Aaron Finch for a splendid 64-ball 68 to bring England back in the contest.
After Moises Henriques fell for 17, Mark Wood tipped the scales firmly in England's favour by getting Steve Smith for a composed 77-ball 56.
Travis Head held things together valiantly even as Glenn Maxwell, Matthew Wade and Mitchell Starc fell in quick succession, courtesy of Mark Wood and Adil Rashid.
In the 44th over of the innings Adil Rashid struck twice to severely dent Australia's chances to finish with a flourish.
Travis Head could be an important fixture in the middle-order for Australia in the future
Mark Wood's 4 for 33 in 10 overs kept Australia to 277 for 9 despite Travis Head's heroics.
Josh Hazlewood struck twice early to push England in bit of a spot at 35 for 3 at the end of 6 overs.
There was a brief rain interruption after the sixth over, but no overs were lost.
After resumption, Eoin Morgan played positively to put pressure back on Australia, getting past a cracking half-century in the process.
Ben Stokes also joined the party smashing boundaries all over the park, seizing the advantage from Australia.
The Australian bowlers wore a look of helplessness as the English duo of Morgan and Stokes took the game away.
The 159-run stand finally came to a close with Eoin Morgan getting run out for an 81-ball 87.
Ben Stokes hit an unbeaten ton to keep England in command
Rain led to an abandonment, handing England a 40-run win by the DLS method