India's first ever left-arm wrist spinner bamboozled Australian batsmen in a terrific post-lunch spell where he accounted for David Warner (56), Peter Handscombe (8) and Glenn Maxwell (8) to put brakes on Australia, who were on a roll during the opening session, courtesy Smith (111).
Smith along with Warner had added 134 runs at a fair clip before Kuldeep weaved magic grabbing 3 for 41 in 14 overs.
But the session was all about the 22-year-old Kanpur boy.
An inspired selection in place of an injured skipper Virat Kohli, it was the surprise element in his bowling that caught the Australian team on wrong foot.
All three batsmen dismissed during the post-lunch session were guilty of not reading Kuldeep from his hand, trying to play him off the pitch.
The extra bounce also helped his cause as Warner after doing all hardwork tried to play a cut shot close to his body only to find that the delivery bounced wee bit more to take a thickish edge to Rahane at first slip.
Australia's Ranchi Test saviour Handscombe shaped for a cover drive to a fullish delivery that turned in to breach his defence.
Maxwell was in a daze as he got the classical wrong' un (googly for right-arm leg-break) as he tried to play for the turn only to find the bails dislodged.
Every wicket that the youngster got had coach Anil Kumble stand up and applaud.
For Australia, it was yet another gutsy effort from the skipper en route his 20th hundred in longest format during which he hit 14 boundaries off 173 balls. A nice tickle down the leg side got him to the three-figure mark, a feat that was acknowledged with standing ovation.
Earlier, in the first session, Smith looked at ease on a true pitch, smashing new ball bowlers Umesh and Bhuvneshwar Kumar with equal disdain.
Ajinkya Rahane, leading the side in place of an injured Kohli, could hardly do anything after Ishant Sharma's replacement Bhuvneshwar bowled a terrible first spell.
He was taken to task by the two experienced campaigners, who started on a positive note after Umesh bowled a beauty to get rid of Matt Renshaw (1). Even Yadav was guilty of bowling bad balls after a good couple of overs.
To make matters worse, his premier spinner Ashwin could hardly trouble the Australia captain in the first session.
It was a different kind of batting from the dashing left-hander but it was effective enough to get to his first half-century of the series. He got reprieve in the very first ball of the match when Karun Nair dropped him in the slip cordon off Bhuvneshwar.
Ashwin was taken to cleaners by Smith, who effortlessly lofted him for a boundary and then rocked back to punch him through the off-side region for a boundary. Gaining confidence, Warner also lofted Ashwin over long-off for his first six.
Smith started with a few drives off Umesh and then warmed up to Bhuvneshwar, who completely erred in length. Bhuvneshwar was hit for six boundaries in his first eight overs.
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