Sri Lanka, riding on the heroics of Angelo Mathews, fell short of what would have been a sensational victory over Australia by just five runs in the tri-series match in Perth on Friday.
Chasing a modest target of 232, the islanders were in the dumps after being reduced to 180 for 9 by the 45th over, but all-rounder Mathews (64) staged a remarkable fightback that threatened to upset Australians at the WACA.
He unleashed a flurry of strokes in the dying stages of the match to raise visions of a stunning victory with a 46-run partnership with Dhammika Prasad, but eventually fell to the penultimate delivery.
That gave the hosts their second successive victory in the tournament.
Mathews faced 76 balls and hit four boundaries and a six in his entertaining knock.
Australia had earlier beaten India by 65 runs in their opening match of the series on February 5 at the MCG.
Left-arm spinner Xavier Doherty was the pick of the Australian bowlers, scalping two wickets for 24 runs in his 10 overs.
Pacer Daniel Christian also bagged two wickets, for 47 runs.
Captain Clarke used as many as six bowlers, including himself, and all claimed at least a wicket.
Pacers Ryan Harris, Mitchell Starc and Clinton McKay as well as Clarke picked a wicket each.
For Sri Lanka, who wasted a fine bowling effort by their bowlers that restricted Australia for 231, it was their second successive loss in the tournament, having been beaten by India by four wickets in their first match at the same venue in Perth on Wednesday.
Sri Lanka did not have any substantial partnership, except for a second-wicket stand of 50 runs from 11 overs between Tillakaratne Dilshan (40) and Kumar Sangakkara (22).
Opener Upul Tharanga (5) was the first to go, in the fourth over, as he dabbed at an angled delivery off Starc without moving his feet and the resultant edge was calmly taken by Clarke in the slips.
The other opener, Dilshan, was going strong with some delightful and sweetly-timed shots though he also lived dangerously with some edges reaching to the boundaries.
One-down Sangakkara was cautious initially but later opened up his arms. He cracked two fours in the same over bowled by Christian to make his intentions clear. But after sharing 50 runs from 11 overs to steady the Sri Lankan innings, the second wicket stand was broken when Sangakkara departed following a mix-up with his partner.
Dilshan refused to respond to the call by Sangakkara after the ball popped up close to the stumps. Sangakkara started running for a single and reached midway the pitch but Dilshan was unmoved and McKay had all the time in the world to snap the stumps.
Sangakkara's 22 came from 32 balls and had three boundaries in it.
Dilshan did not last long, out in the 21st over off Harris, when he inside-edged a delivery to wicketkeeper Matthew Wade. He scored 40 from 57 balls, inclusive of four boundaries.
Captain Mahela Jayawardene (13) fell cheaply as he tried to guide a Christian rising delivery to the third man only to tamely dab it to Wade in the 27th over.
Next over, Doherty dismissed Lahiru Thirimanne (3) with a gem of a delivery that spun in from outside off to hit leg stump.
Dinesh Chandimal (37) batted resolutely for some time but he too fell in the 31st over, LBW to Clarke, who struck first ball.
Mathews held one end together from the 31st over though it seemed all over by the time Sri Lanka were 180 for nine in the 45th over.
He and Dhammika then took the match down the wire.
Sri Lanka needed 18 runs from the final over and Mathews hit a four and a six from the first two balls off Starc as they needed eight from four balls.
The next two balls fetched only a single each and Sri Lanka needed six from two balls, but it all ended with Mathews holing out to Christian at long on while trying a big hit.
Earlier, Australia's batting collapsed in the face of a disciplined Sri Lankan bowling effort.
Skipper Michael Clarke's 57-run knock was the only standout performance among the Aussie batsmen, who were stifled by Sri Lanka's accurate bowling and folded up in 49.1 overs.
Put in to bat, Australia were off to a wobbly start, as opener Matthew Wade was dismissed for just one run by Nuwan Kulasekara.
Wade, who was impressive in his debut match against India, scoring 67 runs, lasted just five deliveries before being caught behind by wicketkeeper Kumar Sangakkara.
David Warner (34) was his usual attacking self, but the fireworks didn't last long. An Angelo Mathews delivery sneaked in between his bat and pad to rattle the stumps.
The left-hander smashed four boundaries and a six during his 29-ball stay at the crease.
Veteran Ricky Ponting (1) flopped yet again; the scintillating Test form was nowhere to be seen as he was trapped leg before by Lasith Malinga.
With the top three coming a cropper, it was left to the middle-order for damage control, and skipper Clarke took charge of the proceedings with a typical mix of caution and aggression.
But with wickets falling at other end at regular intervals, partnerships just did not come through for Australia.
The most fruitful of partnerships were the ones Clarke shared with David Hussey (27) and Daniel Christian (33).
Clarke's fifth-wicket stand with Hussey yielded 49 runs, while the sixth-wicket partnership with Christian added 56 to the total.
After ploughing on for 88 balls, Clarke departed, caught at midwicket by his opposite number, Mahela Jayawardene, off the bowling of Mathews.
Hussey struck a couple of fours and a six during his 38-ball stay, while the more aggressive Christian hit four boundaries and a six during his 44-ball cameo.
Down the order, Clint McKay provided some entertainment with a 24-ball 25, inclusive of three boundaries.
The Lankan bowlers not only took wickets at regular intervals but also kept the flow of runs in check with their disciplined effort.
Backed by their agile fielders, Malinga, Kulasekara, Mathews and off-spinner Sachithra Senanayake, playing only his second ODI, picked two wickets apiece in a spirited performance.
The quartet was miserly in conceding runs, not one of them giving away more than a little over four an over.