Despite leading at half time, England went down 28-27 in Dunedin after being on the receiving end of a second half blitz from the clinical New Zealand backs on Saturday.
A 10-6 lead at half time for the tourists shook the World Champions into life with three second half tries to give them an unassailable two nil lead in the Test Series.
Second half scores from Ben Smith, Julian Savea and Ma'a Nonu showed the true power in the All Blacks' line up and at times the English struggled to hold possession and territory against the relentless tide of the hosts' attacks.
But England saved plenty of pride following a brave late comeback and tries from Mike Brown and Chris Ashton adding to an early Marland Yarde try with 12 points from the boot of Owen Farrell.
England started brightly at the Forsyth Barr Stadium, and as an early chance looked to be going begging, Marland Yarde picked a neat line off Danny Care to power past Richie McCaw and stretch over, adding to an early Farrell penalty.
New Zealand gained a foothold and Aaron Cruden added a pair of penalties himself but England will clearly rue the inability to finish off a score at the end of the first period as Manu Tuilagi, playing on the wing, was superbly snagged by Ben Smith when a score looked certain.
The All Blacks then made the tourists pay for that mistake by running in a trio of scores in a breathtaking half hour.
First, with Tom Wood picking a neat inside line, Billy Twelvetrees' break and offload found the floor, and from the turnover, the All Blacks spread the ball wide, and as Cruden dummied his way through the line, Savea found his full back Smith who cantered home under the posts.
Then it was Savea himself who got on the scoresheet as the All Blacks moved the ball wide and neatly converted an overlap to slide over in the corner.
Ma'a Nonu then dived over with the English defence getting increasingly stretched to put the hosts 18 points ahead, a far cry from England's early 10 point lead.
As England's much lauded cavalry arrived, the game was stretched and Twelvetrees fed Mike Brown who powered his way over to score despite the attentions of Corey Jane.
The final shout went to the English who in added time, worked a neat overlap to give replacement Chris Ashton the score under the posts, but the comeback probably came five minutes late.
With a midweek clash with Canterbury to look forward to this week, England will be looking for their first win on tour with Gloucester's Henry Trinder, Matt Kvesic and today's unused replacement Freddie Burns hoping to be involved.
Speaking to GRTV this afternoon, Director of Rugby David Humphreys hailed the 'never say die' attitude of the team, after despite not being at their best, fighting back to take a 40-32 win after extra time over Connacht.
Jonny May continues on the wing on Sunday as Connacht come to town, and the England wing explains to the local media this week that he is delighted with his form and is looking forward to taking on Pat Lam's men.
Speaking to the local media this week, front rower John Afoa is familiar with the challenge of Connacht from his time in Belfast, and the World Cup winner is fully aware of the challenge they pose ahead of Sunday's meeting in the Champions Cup play off
Speaking ahead of Gloucester's European Rugby Champions play-off against Connacht on Sunday (Kingsholm, 3:30pm), Director of Rugby David Humphreys admitted that he's glad to have more players available than in recent weeks ahead of a tough fixture.
Nick Wood captained the Cherry and Whites on Saturday afternoon, and the experienced front rower expressed his pride in the young squad in defeat to Bath on the final day of the Aviva Premiership season.
Lewis Ludlow scored Gloucester's opening try in the 30-50 defeat at Bath on Saturday, part of an impressive performance by the young back row forward. Speaking after the game, he paid tribute to the young Gloucester side who went toe to toe with the Aviva Premiership semi-finalists.
Speaking to the local media after the game, Director of Rugby David Humphreys gave an honest assessment of the game, and expressed his pride in the way his young charges had performed against the title-chasing hosts.
Speaking to the local media this week, Gloucester Rugby scrum half Callum Braley is excited by the challenge of the West Country Derby, and the ex-Bristol man reveals the squad will be giving their all.
Speaking to the local media this week, David Humphreys admitted that team selection for Saturday's Aviva Premiership fixture at Bath has not been an easy one, with numerous players ruled out due to injury and suspension. However, he pledged that whoever is wearing the Cherry and White will be 100% committed to fighting until the very last minute.
It was a thriller at Kingsholm on Sunday afternoon, as Gloucester snatched victory from the jaws of defeat, leveling the scores in the final minute before triumphing in extra time over a spirited Connacht side.
Having defeated Connacht Rugby in dramatic fashion in the first play-off for the final spot in the 2015-16 European Rugby Champions Cup, Gloucester Rugby can confirm ticketing details for next Sunday's game against Bordeaux-Begles at Sixways.
Gloucester snatched victory from the jaws of defeat and move on to next weekend's European Champions Cup final play-off against Bordeaux-Begles after a dramatic extra time win over a valiant Connacht side.
With Connacht Rugby the visitors to Kingsholm on Sunday (kick off 3:30pm) for Sunday's European Rugby Champions Cup play-off, Gloucester ring the changes from the side that took the field against Bath last weekend.
Matt Kvesic was a double winner at the Gloucester Rugby End of Season Awards Dinner on Tuesday, coupled with being named in the England Rugby training squad and the 23-year old is delighted with how his campaign has gone.