Lunch Australia 266 for 2 (Khawaja 108*, Smith 59*, Nortje 2-39) vs South Africa
Twenty minutes before the break, Khawaja notched his third straight Test ton at the SCG and celebrated with a leap, air punch and then a little jig after taking off his helmet.
It ended a frustrating Test summer for Khawaja, who had missed out on Australia's run glut and only averaged 27.42 from seven previous innings.
He has put Australia on track for a clean sweep of the series with victory to secure a position in the World Test Championship final in June.
Like Khawaja, Smith has a strong record on his home ground having struck three previous Test centuries from nine Tests while averaging above 70.
After the much-talked-about refinement to his technique, having earlier this season abandoned the shuffle across the crease, Smith now returned to a pronounched back-foot trigger movement.
He started slowly with just five runs off his first 29 deliveries before clubbing quick Kagiso Rabada with an extraordinary boundary over midwicket that looked like a cross between a drive and pull.
Smith started to put the foot down before lunch as he took a liking to spinners Keshav Maharaj and Simon Harmer to bring up his half-century.
Play started 30 minutes early after only 47 overs were bowled on day one due to bad light and rain.
More frustration - continuing Sydney's recent run of rain-affected Test matches - ensued when play was halted after just three overs due to drizzle. But it cleared quickly and the forecast for the remainder of the day's play looks promising although rain is likely on days three and four.
South Africa started with quick Anrich Nortje, who single-handedly willed his team back into the contest on day one with the late wicket of Marnus Labuschagne with a gem of a delivery.
Nortje started around the wicket to left-handed Khawaja but failed to conjure the same bite he memorably produced on the opening day, while Rabada was again erratic to continue his disappointing series.
Under-pressure South Africa captain Dean Elgar again raised eyebrows after opting for Maharaj over offspinner Harmer, who had threatened in his return to the team but only bowled five overs on day one.
Maharaj, who was expensive in his nine overs on day one, started poorly with a half volley that was easily dispatched by Khawaja for a couple of runs before a looping delivery deceived the batter and fell just short of cover.
In more suitable conditions for him, Maharaj bowled his best spell of a fruitless series but failed to consistently threaten and was belted for sixes by Khawaja and Smith.
Harmer finally entered the attack after the drinks break, but was not able to cause trouble like he had 24 hours earlier.
A desperate Elgar had no hesitation in taking the second new ball when available 10 minutes before lunch, but Khawaja and Smith defied Nortje's late charge to bat through the session.
Tristan Lavalette is a journalist based in Perth