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.
Motu Matu'u is looking to make up for lost time this week as the Cherry and Whites head to Basque Country to take on Bayonne in the European Rugby Challenge Cup opener. The Samoan hooker made his first appearance in the jersey last weekend, and is hoping to contribute to the team this weekend.
Gloucester's attentions turn to Europe this weekend as they travel to Bayonne for their opening fixture of this season's European Rugby Challenge Cup. Forwards Coach Trevor Woodman told GRTV that the Cherry and Whites will be aiming to top their pool as they've done for the past two seasons, but is well aware of how tough it is to win in France.
Although understandably disappointed at seeing victory slip away at the last minute, Ben Morgan said after the game at Exeter that there were plenty of positives that Gloucester could take from the game.
Speaking after a last-gasp try from Exeter earned the Chiefs a 27-27 draw at Sandy Park on Saturday, Charlie Sharples admitted to mixed feelings. The game saw him score a try on his 200th competitive appearance for the club, but the frustration from not closing out the win was clear.
David Humphreys was minutes away from a winning interview on Saturday afternoon, but a late try from Exeter Chiefs meant the points were shared at Sandy Park. Humphreys spoke with the local media after the 27-27 draw.
Speaking to the media ahead of Saturday's Aviva Premiership fixture away at Exeter Chiefs, Director of Rugby David Humphreys reiterated that there are elements of Gloucester's game that are in good shape at present, that the performance against Bath was a step forward from Newcastle but that individual errors are costing the Cherry and Whites dear.
Lesley Vainikolo was a welcome visitor to Kingsholm this week, reminiscing as he wandered around the stadium. The big winger is back in Gloucester to take part in Sunday's Mitsubishi Motors UK Hybrid Cup (kick off 3pm).
Centre Matt Scott, a try-scorer in Bayonne last weekend, insists that Gloucester are taking nothing for granted when they welcome Benetton Treviso to Kingsholm on Saturday in the European Rugby Challenge Cup (kick off 3pm).