Kumar Sangakkara remained unbeaten on 61 in his 100th Test to launch a strong Sri Lankan reply to Australia's first innings total of 316 on the second day of the third and final Test on Saturday.
Former captain Sangakkara walked out to a rousing ovation from the sparse crowd and added 69 for the unbroken third wicket with the experienced Mahela Jayawardene (31 not out) to take Sri Lanka to 166 for the loss of two wickets at close.
Australia paceman Peter Siddle breached the defence of Lahiru Thirimanne (28) while Tharanga Paranavitana (46) fell to a sharp catch by Ricky Ponting off Mitchell Johnson at short cover.
Needing a victory to draw the three-Test series, Sri Lanka trail the visitors by 150 runs.
Earlier, Michael Hussey scored his 15th Test hundred and his fourth against Sri Lanka to guide Australia to a first innings total of 316.
Resuming on their overnight score of 235 for five, Australia added 81 runs on Saturday with Hussey scoring 55 of them to move from 63 to 118 in an innings which lasted 178 deliveries and included 12 fours and two sixes.
Once debutant Shaminda Eranga removed Brad Haddin (35) in the fifth over of the day to end a sixth-wicket stand of 75 with Hussey, the Sri Lankan bowlers wasted little time in wrapping up the innings.
Hussey was stranded at one end as Sri Lanka chipped away at the wickets from the other.
Chanaka Welegedara, who went wicketless on day one, dismissed Mitchell Johnson (8) and Siddle (0) off successive deliveries with Hussey stuck on 99 at the non-strikers end.
Hussey eventually reached his century with a single to the leg side before Eranga bowled him to end with figures of 4-65.
Welegedara also picked up Trent Copeland's wicket to finish with figures of 3-75.
Australia lead the series 1-0 after winning the first match by 125 runs in Galle before the teams played out a rain-affected draw in Pallekele.
Australia first innings: (overnight 235-5)
S Watson c Dilshan b Eranga 8
P Hughes b Lakmal 0
S Marsh b Herath 81
R Ponting c P Jayawardene b Lakmal 48
M Clarke c P Jayawardene b Eranga 6
M Hussey b Eranga 118
B Haddin c P Jayawardene b Eranga 35
M Johnson c Herath b Welegedera 8
P Siddle c Paranavitana b Welegedara 0
T Copeland c M Jayawardene b Welegedara 1
N Lyon not out 3
Extras: (lb-4, nb-3, w-1) 8
Total: 316 (104.3 overs)
Fall of wickets: 1-0, 2-22, 3-101, 4-120, 5-190, 6-265, 7-293, 8-293, 9-295
Bowling: Welegedara 21-6-75-3, Lakmal 21-3-60-2 (nb-3), Eranga 23.3-6-65-4 (w- 1), Herath 27-5-78-1, Dilshan 12-0-34-0
Sri Lanka first innings:
T Paranavitana c Ponting b Johnson 46
L Thirimanne b Siddle 28
K Sangakkara not out 61
M Jayawardene not out 31
Total: 166 for 2 (65 overs)
Fall of wickets: 1-56, 2-97
Bowling: Copeland 15-5-34-0, Siddle 11-3-25-1, Johnson 11-0-49-1, Watson 11-5-20-0, Lyon 15-2-33-0, Hussey 2-1-5-0.