The Australians jumped out of the blocks courtesy of Patty Mills, who helped his side to a 9-2 start as he leaked out for several fast break opportunities to score seven quick points.
Brazil were able to settle following a time-out though, shooting 58% for the first term to gain a lead which they then added to with an impressive 23-10 second period.
Raul Neto (17 points) and Marcelo Huertas (nine points, seven assists) wormed their way through the defence as the hosts showcased a combination of back-court speed with the big frames of Nene and Marquinhos which is sure to bother several teams in Rio.
Coming out of the main break, Matthew Dellavedova (six points, five assists) kick-started Australia's comeback with a three and a concerted effort in the defensive pressure from the entire team saw the visitors fight their way back into the game.
They finished the third term on an 11-3 run with a four-point play from Mills and a three-point play from Ryan Broekhoff (six points) on the three-quarter time buzzer breathing life into the Australians.
The margin was then trimmed to single figures early in the final period as David Andersen (seven points) joined in at the offensive end with a three but that sparked Brazil back to life as they finished strongly with a 32-15 fourth quarter.
Mills led the way for Australia as the only player to reach double-digits in scoring with 18 points although they did get some solid production off the bench from Andersen, Cameron Bairstow (six points) and Kevin Lisch (six points) while Aron Baynes tallied six points and six rebounds.
The full box score can be found here.
Australia will now face Lithuania at 1.00am AEST on Sunday July 31 and will play one final game on August 1, dependent on previous results, before heading to Rio.