The home team claimed the four remaining wickets in just under an hour on the final morning in Adelaide and are now just one victory away from winning back the famous urn after three consecutive series defeats.
It was a second emphatic defeat for England after they lost the first Test in Brisbane by 381 runs and the tourists must regroup before the third match of the series, which starts in Perth on Friday. England have only won once in 12 Tests on the traditionally pacy WACA pitch.
"I think that something that is most pleasing is we are finally getting some results," said Australian skipper Michael Clarke.
But he added: "I think we have to be realistic. That's our second Test win in the past 12 months -- certainly not a record we're proud of.
"There's a lot of work for us to do to get back to being the number one team in the world and that's our goal."
England captain Alastair Cook admitted his side lost the game on the first day when they were guilty of several dropped catches, allowing Australia to pile up an imposing 570 for nine declared.
"On that first day we had an opportunity to a put a bit of pressure on Australia. We let a few chances go, and they really made us pay for that," he said.
Cook said England's first innings total of 172 was not good enough.
"You don't get too many chances on good wickets and we had the opportunity then and we didn't take it. I thought that was the main difference. Australia took their chances very well," he said.
"It's been a tough five days and we've got to look at ourselves, look at our performance and come back stronger," Cook added.
Under overcast skies, wicketkeeper Matt Prior showed defiance with 69 off 102 balls, before he became the ninth batsman to go.
Peter Siddle finished the best of Australia's bowlers with four for 57.
Stuart Broad fell to the fifth ball of the final day after losing his battle of wills with Siddle.
Broad defiantly pulled Siddle's fourth ball for six and then repeated the shot on the next ball only to find Nathan Lyon at deep square leg and fell for 29.
England's Barmy Army supporters attempted to get under Mitchell Johnson's skin, but the paceman, named man of the match for his decisive seven wickets in the first innings, ignored them and instead peppered Prior with a couple of short-pitched deliveries.
Prior saw off Johnson and was looking to reprise his fighting unbeaten 110 off 182 balls to bat England to a draw in the third Test against New Zealand in March.
The wicketkeeper reached his 27th Test half-century off 88 balls with a pulled shot to the boundary off Siddle and he was severe with Johnson.
Graeme Swann was caught at second slip off Ryan Harris for six with the England spinner swinging his bat angrily at the stumps for playing at a ball he should have let go.
And Prior's resistance ended when he fell hooking Siddle to Lyon on the boundary rope.
Monty Panesar was the last England wicket to fall, hitting to Chris Rogers at short extra cover to give Harris his third scalp of the innings.
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