On another lightning quick day at the Saint-Quentin-en-Yvelines velodrome, Dutch star Harrie Lavreysen shattered the men's sprint world record, stopping the clock at 9.088sec.
Led by Sam Welsford, the Australian pursuit quartet roared through 16 laps in 3:42.067.
It was 1.5 seconds outside their own world record set in qualifying, but enough to relegate fierce rivals Britain into second.
Defending Olympic champions Italy beat world champions Denmark in the bronze medal race.
"It is pretty crazy to call ourselves Olympic champions now. We probably did not have these expectations when we started training together," said Welsford.
"To come together like we did in the last month was pretty special.
"It has been 20 years since Australia won this, so that will sink in over the next week," he added.
Australia -- Welsford, Oliver Bleddyn, Conor Leahy and Kelland O'Brien -- carved a huge chunk out of Italy's world record on Tuesday to signal their intent.
The win was their first in men's pursuit since the Athens Games before Britain won gold four years later in Beijing and repeated the feat in London and Rio.
The British faced a rebuild after the retirement of Bradley Wiggins and Ed Clancy and slumped to seventh in Tokyo three years ago.
"We knew we had to be on the line, we had a lot to do, it wasn't out of our grasp," said Britain's Charlie Tanfield.
"We didn't funnel in at the end but we're still very proud of what we achieved."
Expectations
Faulkner backed up her road race gold by helping teammates Jennifer Valente, Lily Williams, Chloe Dygert blast past New Zealand in 4:04.306 to win their first Olympic women's pursuit gold.
"We knew we had a strong team coming in, and I feel like the lucky one because they (her teammates) have won medals before on the track and I haven't," said Faulkner.
"I just wanted to live up to their expectations."
It was a rare accomplishment by Faulkner, who outwitted Dutch veteran Marianne Vos and Belgium's Lotte Kopecky to win the road race on Sunday.
Britain, without Katie Archibald who suffered a broken leg in a freak pre-Games accident, took the bronze.
The British won gold at London in 2012 when the event was first added to the Olympic programme and defended their title in Rio.
But they were edged into silver in Tokyo by world record holders Germany, who only finished sixth in Paris.
Defending gold medallist Lavreysen reinforced his status as heavy favourite in the sprint, unleashing some sensational speed.
The five-time world champion, who led the Netherlands to the team sprint title on Tuesday, dismantled the world record in qualifying.
He clocked 9.088 on the heels of Australia's Matthew Richardson becoming the first man ever under 9.100 when he posted 9.091 to smash Nicolas Paul's five-year-old mark.
Both men returned to safely negotiate the heats and make the quarter-finals.
With Dutch defending champion Shanne Braspennincx not in Paris, the women's keirin is wide open.
New Zealand's Tokyo silver medallist and current world champion Ellesse Andrews comfortably progressed to the quarter-finals.
So did British hope Emma Finucane, who already has one gold in the women's team sprint, along with Germany's Emma Hinze and China's Guo Yufang.
