Declan Kidneys' men produced a simply sensational display to defeat the newly-crowned Tri Nations Champions in the biggest shock of this year's World Cup.
With the teams level at 6 apiece at half time in Auckland, Ireland dominated the second 40 minutes, scoring nine unanswered points to shock an Australian side that had just beaten New Zealand and South Africa and then cruised past Italy a week ago.
Jonathan Sexton kicked a penalty and a drop goal in the first period and another penalty in the second, while Lions veteran Ronan O'Gara added a brace of penalties after replacing injured centre Gordon D'Arcy.
Ireland were good value for their victory and could have won by even more had Tommy Bowe not been hauled down two metres short late on and then Connor Murray's last-gasp try not been disallowed.
The win comes on the back of a frustrating six months for Ireland who had tasted success just once since their final RBS 6 Nations fixture with England in March. Four World Cup warm-up defeats to Scotland, England and France (twice), were followed by an unconvincing win over the United States in the opening round of the global gathering and Ireland went into the second pool game as heavy underdogs.
"It was the performance we knew we had in us," said Ireland skipper Brian O'Driscoll.
"You'd swear we were in Dublin with that crowd and it was our job to give them something to shout about.
"Paul [O'Connell] said it in the captain's meeting that we had to go to the well today.
"It's half the job done, we've two wins and we've two more to get. As much as we'll enjoy this, let's not lose sight of the remaining two games."