With India in trouble at 25 for three, Yuvraj (150 off 127 balls) and Dhoni (134 off 122) joined hands to forge a 256-run partnership to put their team in a position of strength from a precarious one.
The two veterans used their years of experience to turn the tide for India after England opted to field at a packed Barabati Stadium.
Yuvraj was on fire ball one and hammered 21 fours and three sixes in his career-best knock in ODIs. The southpaw, brought back into the national team, could not have silenced his detractors in a better way as got to his 14th ODI hundred, which was his first since the 2011 World Cup.
Dhoni too crossed the three figure mark after a while with his last hundred coming way back in 2013 when he struck an unbeaten 139 against Australia at Mohali.
He ended up hammering 10 fours and half a dozen sixes, scoring his 10th ODI hundred in the process and first since handing over captaincy to Virat Kohli.
It was raining sixes and fours especially in the last 10 overs with India lapping up 120 runs.
England will have to bat out of their skins to overcome the imposing target.
Iyer had not faced tall Aussie pacer Bird in reaching 85 last evening but dominated the bowler from the first ball that he took strike against today, racing to the hundred in the bowler's second over of the day, hitting him for three fours with the pick being a straight drive.
His hundred came up in 157 minutes and 103 balls and contained five sixes and 11 fours.
While Iyer continued to bat in forthright manner without any difficulties, the other overnight not out batsman Rishabh Pant - with whom he added 55 runs for the fifth wicket - gave a tame return catch when lured out by O'Keefe in his first over of the day.
Gowtham limped his way to the crease at the fall of Kishan but later showed no signs of the hamstring injury he had sustained while fielding as he blasted the Aussie bowlers, Lyon in particular, with clean shots.
Lyon, who took two wickets yesterday, was deprived of his third when Maxwell dropped Gowtham (when on 14) at deep mid-wicket, a sitter. After the lucky break, the batsman smashed Lyon for four big sixes, two over long on and two more over the straight field.
Holding a lead of 66, Australia advanced to 59 for two in the second innings at tea, after losing opener Renshaw and Glenn Maxwell (1), promoted in the order.
Both Renshaw and Maxwell were bowled trying to drive home team captain Hardik Pandya and Navdeep Saini respectively.
After tea, Warner departed playing an expansive drive against Dinda and was caught at gully. He batted for 75 minutes and struck six fours.
slip cordon past Smith as nothing went for Australia in the wicketless first session.
Overnight 130, Pujara who has three triple hundreds in first class cricket, remained focused throughout and restrained from playing any risky shot which was was the hallmark of his innings.
Pujara later overcame his the record of his 'role model' Dravid who had faced 495 balls in his 270 against Pakistan in April 2004.
It was a throwback to their 316-run unbroken second innings partnership in Rest of India's Irani Cup earlier this year, Pujara and Saha looked indefatigable and refused to get out after India resumed on 390/6 under overcast conditions.
The Aussie pace duo tested the duo with rising deliveries, with one by Cummins hitting Saha's chest but the wicketkeeper batsman remained unperturbed and posted his second century in four Tests, with the last one coming against Bangaldesh in Hyderabad last month.
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