The match ended more than a day early after Australia dominated every session since Thursday's start to crush England.
"Full credit to Australia," said England captain Alastair Cook. "They got on top of us on the first day and never let us up again."
First, Australia batted and amassed 566-8 declared thanks to major innings from Chris Rogers and a double century from Steve Smith, and then bowled England out for 312.
The tourists declared just before lunch on Sunday after a quickfire 254-2 in their second innings to set England a massive 509 runs to win.
It was clear England would struggle, but the team collapsed in ignominious fashion to 103 all out as Australia's rampant bowling attack exposed serious flaws in England's batting.
"It's not good enough, just not acceptable," Cook said. "We have been totally outplayed for 4 days."
The series is now level 1-1 with three matches to play.
Australia captain Michael Clarke, under fire after the first test defeat in Cardiff, paid tribute to the attitude shown by his players, especially Rogers and Smith. "Credit to those two, they turned it around for us," Clarke said.
And he made special mention of the bowler who is fast becoming England's bogeyman: "Mitchell (Johnson) is a great weapon to have in your team."
Johnson was the standout Australia bowler, taking three wickets in each innings with his fierce, short-pitched left-arm deliveries.
Set a massive 509 runs to win, England was 64-5 at tea, and staring at defeat after caving in.
The 169-run victory in Cardiff looks a long time ago now to England.
Both of England's openers were back in the pavilion within half an hour of lunch and Cook hinted at changes in the misfiring top order.
"It's certainly something we'll be looking at in the next couple of days," he said.
Looking to bat for at least 150 overs, the hapless Adam Lyth edged a fast delivery from Mitchell Starc to wicketkeeper Peter Nevill in a repeat of his first innings dismissal. Lyth managed 7 runs — 7 more than his first innings dismissal — and England are still struggling to find a successful opening partner for captain Alastair Cook.
Johnson then came on to bowl and Cook wafted his bat at a wide delivery to also be caught behind. He had scored 11 and England were 23-2. He top scored with 96 for England in his first innings.
With Starc, Johnson, Josh Hazlewood and Mitchell Marsh bowling hostile short-pitched sessions, England's batsmen looked scared and wickets tumbled.
Gary Ballance, his feet trapped inside the crease, was the third wicket for Australia with Marsh's first delivery. Balance also edged to Nevill, giving the debutant wicketkeeper his third catch of the innings.
Ian Bell is in dreadful form and it showed as he struggled against the pace attack. He was eventually undone by the gentle spin of Nathan Lyon, who induced a simple bat-pad catch.
A few minutes later the humiliation was complete when Ben Stokes, who scored 87 in the first innings, was run out for a duck after batting for only three balls by a throw from Johnson. Stokes did not bother grounding his bat and his foot was in the air as he gained his crease.
"He'll only do that once. It wasn't great cricket," said Cook.
The wickets tumbled even more quickly as the tail was exposed, with only Stuart Broad showing any defiance with 25, but the England second innings lasted only 37 overs.
Earlier, Australia declared just before lunch on 254-2 off just 49 overs, scoring 146 in the morning session as England's demoralized bowlers laboured.
Opener David Warner scored 83 and Steve Smith added to his first innings 215 with a sparkling 58 with some outrageous shots, including three consecutive fours in one over from Stuart Broad, bowling a yard outside the off stump. Smith played all three deliveries to the square leg boundary, going on to grab his half century before being bowled by Moeen Ali.
Smith said after the game he was pleased to succeed at Lord's which had not been kind to him in the past. "I was pretty keen to do well here," he said. "That partnership with Chris Rogers got us off to a good start and we kicked on from there."
The only dark spot of the morning concerned Rogers, who was 49 not out when the opener beckoned for medical assistance. Looking groggy, Rogers sat on the floor for several minutes before being led from the field.
Australian team officials said Rogers suffered a sudden dizzy spell and was resting at Lord's. He did not go to hospital.
Clark said the problem on Sunday was nothing to do with the blows Rogers has taken on the head. "I'm confident he'll be all right for the next match."
The third test begins on July 29 in Birmingham.