Australia captain Smith, who won the toss and sent New Zealand in to bat on a green Basin Reserve pitch, shook off some recent poor form to reach 71 before he was caught and bowled by Mark Craig.
Khawaja scored his fourth Test half century with 57 not out, while Adam Voges (seven not out) was bowled by Doug Bracewell in the final over of the day only to survive because of a contentious no ball. Television replays showed the delivery was clearly legal.
The tourists had earlier dismissed New Zealand for 183, Josh Hazlewood and Peter Siddle reducing them to 51-5 in the 12th over and Nathan Lyon polishing off the tail after lunch.
Hazlewood finished with 4-42, Siddle took 3-37, while off-spinner Lyon grabbed 3-32 and the tea break was taken 10 minutes early when Trent Boult was caught at long on for 24.

Craig top-scored with 41 not out but the pitch appeared to have lost much of its bite by the end of New Zealand's innings, which lasted 48 overs. Tim Southee, however, managed to get rid of both Joe Burns (0) and David Warner (5) to leave the visitors 5-2 in the third over and with the sell-out crowd in full voice.
Southee and Boult kept up the pressure on Smith and Khawaja but when they scored 37 runs, from nine fours and a single, in 16 deliveries, the shackles were broken and crowd silenced.
That period of play included Smith being dropped by Craig at second slip off Bracewell but that was the only realistic chance they gave until BJ Watling missed a stumping of Khawaja in the 25th over. Smith was eventually dismissed about 20 minutes before stumps when he hit the ball back to Craig to end the 126-run partnership.


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