India, replying to Australia's first innings total of 478, took their overnight score of 435-5 to 495 before they were all out just before lunch at the Chinnaswamy stadium in Bangalore.
Tendulkar's dismissal at 486-5 triggered a lower order collapse in which the last five Indian wickets fell for nine runs.
Tendulkar, who was on 191 overnight, reached his double century 25 minutes after the start with a quick single off Ben Hilfenhaus.
He celebrated the feat with an exquisite on-drive for four later in the same over.
It was the world batting record holder's sixth double-century and his second in four Tests, having made 203 against Sri Lanka at the Sinhalese Sports Club in Colombo in July.
The 37-year-old, who is in his 21st year in international cricket, has already notched up six three-figure knocks this year, besides making 98 in the previous Test in Mohali.
India, the top-ranked Test team, lead the short series 1-0 after the dramatic one-wicket win in Mohali.
India went past Australia's total just before the morning drinks breaks when Tendulkar drove Peter George for a single.
Tendulkar was dismissed in the second over after resumption when he edged an intended cut off fast bowler George on to his stumps, giving the beanpole South Australian a treasured first Test wicket.
The Indian's vigil at the crease lasted nearly nine hours, in which he hit 22 boundaries and two sixes.
Australia earned another wicket in the next over when Harbhajan Singh was caught at short mid-wicket by Ricky Ponting off Shane Watson after making four.
George claimed his second wicket when Zaheer Khan spooned an easy catch to the cover region and India slipped from 486-5 to 494-8.
Indian captain Mahendra Singh Dhoni, who made 30, became Nathan Hauritz's first victim in the innings when he edged a catch to Michael Clarke in the slips.
Hauritz then trapped last man Shanthakumaran Sreesanth leg-before three balls later to finish with two for 153 from 39.5 overs.
Left-arm fast bowler Mitchell Johnson was the most successful bowler with 3-105, while George took two wickets.