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.
After a good start, and dominating for long periods at the Ricoh, skipper Tom Savage spoke after the Wasps defeat to GRTV about the small things that Gloucester have to work on as well as focussing on some of the positives.
Gloucester Rugby will take on Wasps on Sunday in their first ever visit in the Aviva Premiership to the Ricoh Arena. Speaking to the local media today, Director of Rugby David Humphreys previewed the game as well as giving an update on the injured Henry Trinder.
Following the 48-10 Aviva Premiership win over London Welsh on Saturday, Dan Murphy praised his team mates for battling right up to the very last minute in difficult conditions and maintaining the momentum that the team have built in 2015.
Henry Purdy scored two memorable tries against London Welsh at Kingsholm on Saturday, and attributed the first one to hard work on the training ground before describing how much he's enjoying playing his rugby alongside friends like Callum Braley.
Gloucester dominated for long periods against Wasps at the Ricoh Stadium on Sunday afternoon but were made to pay the price for defensive lapses and a number of key refereeing decisions not going their way in a 32-21 defeat.