After Kallis' 161 helped the hosts to recover to 362 all out, Steyn removed danger man Virender Sehwag for 13 before a brilliant piece of fielding from AB de Villiers sent Rahul Dravid back to the dressing room for five. Sehwag made a typical start, flashing hard at anything outside off-stump, but he mis-timed an attempted drive and chipped it to mid-off. South Africa skipper Graeme Smith dived forward to take a good, low catch.
Dravid and Gautam Gambhir had several nervous moments - all of them through bad communication - in their nine-run stand and it was no surprise that the partnership was ended via a run-out, although the South Africans will be the first to admit they were lucky.
Gambhir got a thick outside edge to gully in Lonwabo Tsotsobe's first over, but Alviro Petersen couldn't hang on. De Villiers snapped up the ball after running back from third slip and then hit the stumps. The two Indian batsmen decided to take a single, but Dravid was found short of his ground. The veteran was furious as he walked back to the stands.
Sachin Tendulkar managed to keep Gambhir company until tea.
Earlier, an injured Kallis frustrated India's bowlers as he pushed the Proteas to a decent first-innings total.
The all-rounder, who started the day on 81, was in a lot of pain throughout the morning session after picking up a reductor strain and it's doubtful whether he will able to bowl in the match.
The momentum swung after India took the new ball as soon as it became available. First Shantha Sreesanth bowled Ashwell Prince (47) with a jaffer that pitched outside and zipped between the gate to crash into the off-stump. The very next ball the out-of-form Mark Boucher was caught behind.
Zaheer made sure that 262 for five turned into 272 for seven after Steyn feathered an excellent shorter ball to gully. The fast bowler also departed without troubling the scorers.
Kallis was admiring the mess from the other end, but knew he had to get going before he ran out of partners. A single past square-leg eventually took him to his century, much to the delight of the Newlands faithful. His 39th Test century came off 209 balls.
He soon lost another partner as Sreesanth claimed his third Test career five-for and second in South Africa. Morne Morkel failed to make the most of his promotion above Paul Harris in the order after his attempted shot out of the ground ended up in the wicketkeeper's gloves following a nick.
Harris managed to stem the flow of wickets during a 55-minute stand with Kallis and although he contributed only seven, he allowed his senior partner to keep the scoreboard ticking. The spinner was eventually out after fending off one aimed at his ribs to gully.
Tsotsobe also managed to frustrate the Indian team, but some of Mahendra Dhoni's tactics have to be questioned. Tsotsobe contributed only eight in a partnership of 52 as Kallis farmed the strike brilliantly.
Kallis' excellent innings of 161 from 291 balls was finally ended when he looked to cut a Zaheer delivery, but got a nick to Dhoni.
India's fast bowlers shared the 10 wickets, with Sreesanth the pick with five for 114 and Zaheer finishing with three for 89.
