The Wallabies are in danger of slumping to their worst spring tour of Europe in almost a decade after falling to Ireland in Dublin on Saturday night (Sunday NZT).
The Wallabies need to beat England at Twickenham next weekend to ensure they win at least two of their four tests as Michael Cheika's men continue to adjust to a new system.
Australia hasn't lost three tests in Europe since 2005 and the 26-23 defeat in Dublin hurt even more given it was in Cheika's former home town.
Kurtley Beale ended his six-week test exile, but the troubled playmaker couldn't conjure a late victory after the Wallabies overcame an early 17-point deficit to get back into the contest.
It was Cheika's second loss in a row as Wallabies coach after they were defeated by France last week and while it's not all doom and gloom given both losses were by three points, the Wallabies are struggling less than a year out from the World Cup.
The loss to Ireland was compounded by too many mistakes in the last 10 minutes when the Wallabies had a chance to snatch victory.
The Irish crowd erupted and players threw their hands in the air as they repelled one last Wallabies attack to hold on for a historic win.
Ireland hadn't beaten Australia in Ireland since 2006 and the tight win at Lansdowne Road confirms its reputation as the toughest European team.
Questions will be asked about Cheika's decision to inject new blood after the loss to France while Quade Cooper and Will Genia are pushing for starting spots.
Australia scored three tries to two but Irish five-eighth Jonathan Sexton's boot was the difference, with the international player of the year nominee finishing with 12 points and a try assist.
"It was a great win, we got off to a great start but unfortunately we let them back into the game with some poor defending," said Ireland captain Paul O'Connell.
"They're incredibly dangerous, the speed, power and size and they're very clever.
"We haven't finished games well, so to keep them out in a tight game is really satisfying."
Australia was forced to fight back from a horrible start, trailing 17-0 after just 15 minutes.
The Wallabies have failed to score first points in any match they've played under Cheika so far and they were again forced to rally to save the game from turning into an embarrassment.
International player of the year nominee Jonathan Sexton was the architect, constantly putting the Wallabies under pressure and directing a pin-point kick to flying winger Simon Zebo for the first try.
Rookie Luke Jones struggled in the opening battle, held up twice in tackles which led to Australia turning over possession and Ireland's first try.
When Tommy Bowe diffused a five-on-one Australian attacking chance by intercepting a Nick Phipps pass and run 85 metres, the Dublin crowd was in raptures.
But the deafening noise must have ignited something for the Wallabies and they somehow got back in the match when Phipps swerved his way through four defenders to break Ireland's momentum.
Remarkably the Wallabies found themselves in the lead when Bernard Foley scored off what could have been ruled a forward pass and Phipps crossed again.
Ireland was riding high after six consecutive test wins before playing against Australia, including winning the Six Nations and beating South Africa two weeks ago.
Israel Folau's fingertips saved Australia from facing a half-time deficit, but Sexton's after-the-siren penalty locked the score at 20-20 at half-time.
Lansdowne Road was Cheika's home for five years when he was in charge of Leinster.
He led the club to a European Cup title and the strength of the Irish team is partly due to his success, with 11 Leinster players in the Ireland game-day squad.
The Wallabies were dealt a massive blow when in-form outside centre Tevita Kuridrani hobbled off with an injured leg.
But Kuridrani's exit gave Kurtley Beale the chance to revive his Test career after a controversial six weeks despite not paying his A$45,000 (NZ$51,000) fine for sending a lewd picture to former team business manager Di Patston.
Beale went straight through a gap with his first touch, but it was called back for a forward pass.
Australia's defence is still showing signs of adjusting to Cheika's new systems. But they were able to fight and scrap to repel Irish attacks.
The Wallabies' set piece also showed improvement, with the lineout constantly causing Ireland dramas and the scrum holding on until it started to collapse under pressure in the second half.
The intense battle went to a new level in the second half and Ireland wrestled the lead back with 27 minutes to go with a long-range Sexton penalty.
It proved the decisive play with neither team able to score a try in the second half and Ireland hanging on for another win.
Ireland 26 (Simon Zebo, Tommy Bowe tries; Jonathan Sexton 2 conversions, 4 penalties) Australia 23 (Nick Phipps 2, Bernard Foley tries; Bernard Foley conversion, 2 penalties) at Lansdowne Road, Dublin, on Sunday morning Australian time. Referee: Glen Jackson.
