Warne clean bowled England opener Andrew Strauss for 50 on the second ball of his fourth over to become the first player in history to reach the once-unimaginable milestone.
Warne's breakthrough triggered wild celebrations at the Melbourne Cricket Ground and breathed new life into a day marred by rain stoppages.
It also left Australia in a strong position after they lost the toss and were sent into the field first despite the overhead cover providing plenty of assistance to their seamers.
England limped to lunch on 36-1 after 45 minutes of the first session were lost to the weather and added 81 in the second session for the loss of another three wickets.
Alastair Cook was the only batsmen to go before lunch, departing for 11, nicking a catch off express paceman Brett Lee to wicketkeeper Adam Gilchrist.
Ian Bell departed for seven just after the second session began when he was trapped lbw by Stuart Clark, who caused the tourists no end of trouble with his nagging accuracy.
Clark should have had a second wicket when Strauss fended a catch straight to Matthew Hayden at gully only to see the chance put down.
Gilchrist also dropped a catch off Paul Collingwood, from Glenn McGrath's bowling, when he was on two but the miss did not prove costly.
Collingwood and Strauss both survived a series of confident appeals from the Australians before their luck ran out in successive overs.
Collingwood fell for 28 when Lee found the edge and Ricky Ponting took a sharp catch at second slip, then Strauss went for 50 when Warne deceived him with a leg break that cannoned into his middle stump.
England captain Andrew Flintoff was unbeaten on 13 with Kevin Pietersen not out on three when tea was taken half an hour late to make up for some of the lost time.
The umpires announced that the final session would be extended by up to 45 minutes to fit in the full quota of overs.
A massive crowd approaching 90,000 had filed into the MCG in the hope of seeing Warne capture his 700th in his final Test at home after he announced last week he was retiring after the Ashes.
Warne's landmark wickets:
|100th||Brian McMillan||South Africa||Adelaide||1993-94||23rd|
|200th||Chaminda Vaas||Sri Lanka||Perth||1995-96||42nd|
|300th||Jacques Kallis||South Africa||Sydney||1997-98||63rd|
|400th||Alec Stewart||England||The Oval||2001||91st|
|450th||Ashwell Prince||South Africa||Durban||2001-02||101st|
|500th||Hashan Tillekeratne||Sri Lanka||Galle||2003-04||108th|
|550th||James Franklin||New Zealand||Adelaide||2004-05||117th|
|650th||Ashwell Prince||South Africa||Perth||2005-06||133rd|
Note: The wicket of Irfan Pathan at Chennai in 2004-05 (in his 114th Test) was 533rd for Warne, which made him the most successful bowler in Test history.
Statistics: Rajneesh Gupta
Photograph: Getty Images