Shane Heal made a four-point play to start the second overtime period and scored 13 of Australia's final 17 points in a hard-fought 109-101 win over Brazil on Wednesday.
Heal finished with 35 points, shooting 8-for-15 from three-point range. Andrew Gaze added 28 points.
"Shane was clearly our hero tonight," Gaze said.
Brazilian star Oscar Schmidt scored 19 points in the first half, five in the second and none in 10 minutes of overtime.
In other games, Croatia shook off an ugly first half and crushed Angola 71-48 behind Dino Radja's game-high 20 points; Predrag Danilovic scored 19 points in leading Yugoslavia over South Korea 118-65; and China defeated Argentina 87-77.
"I think the team played hard but we just missed open shots," said Radja, who plays for the NBA's Boston Celtics. "It was a bad day."
The medal-contending Croatians shot 27 percent and the undersized Angolans 26 percent in a first half that ended with the African champions trailing by just 26-23 after falling behind by as many as 10 points midway through.
Croatia turned it up in the second half and wound up shooting 38 percent for the game; Angola shot 29 percent.
Croatian swingman Toni Kukoc of the Chicago Bulls got 12 of his 16 points and five of his six assists in the second half.
In their loss to Australia, the Brazilians were furious over what coach Ari Vidal called "one-sided" refereeing.
"I had not one free throw in the whole game," said Schmidt, who is 38 and playing in his fifth Olympics. "I've never seen it in my life."
Australia had 38 free throws and Brazil 18.
Australian coach Barry Barnes credited tough defense from Andrew Vlahov and Scott Fisher for shutting down Schmidt.
The Yugoslavs, sprinkled with NBA players and prospects, had six scorers in double figures and were never extended, leading by 29 points at halftime.
"The Koreans are smaller, but they are very fast," coach Zelimir Obradovic said.
Yugoslavia is now 3-0, with Brazil up next. The Koreans are 0-3 and face Greece next.
The Yugoslavs were asked whether they wished they had a preliminary-round tuneup against the U.S. Dream Team, which is in Group A.
"I think it's okay," Danilovic said. "We hope to play them in the finals."