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.
Having skippered Scotland to a hard fought 25-13 defeat against England at Twickenham on Saturday, Greig Laidlaw spoke of the frustrations of his side doing so many good things and making real progress as a team but still finishing on the wrong end of the scoreline.
GRTV caught up with Neil McCarthy as he was unveiled as the new Head of Academy. The ex-Gloucester front rower is looking forward to getting to work with the vast arrays of talent in the Academy and across Gloucestershire.
Although understandably disappointed to see Northampton snatch a 33-33 draw with a last gasp try on Saturday, Gareth Evans told GRTV after the game that the result shows how far Gloucester have come as a team this season.
Gloucester scrum half Greig Laidlaw spoke to GRTV after the 33-33 draw with Northampton Saints on Saturday, and the Scotsman described how the hosts played some great rugby, but will rue not holding the lead which keeps them in touch with the top seven.
Although Gloucester could take many positives from the 33-33 draw with Northampton Saints on Saturday, centre Bill Meakes admitted it was a strange feeling at the final whistle with Gloucester having probably done enough to win the game.
Speaking after the 33-33 draw with Northampton Saints on Saturday, David Humphreys admitted that he was happy with many aspects of the team's performance but regretted a missed opportunity to defeat the Premiership champions.
Speaking to the local media this week, Richard Hibbard is relishing his return to the Cherry and White jersey as the hosts take on Aviva Premiership leaders Northampton Saints on Saturday afternoon (ko 3:15pm)
Ahead of the visit of Northampton Saints to Kingsholm in the Aviva Premiership on Saturday (kick off 3:15pm), Head Coach Laurie Fisher admitted that it's good to have more selection options as the RBS Six Nations takes a break.
Fresh from his first training session with the Cherry and Whites, new arrival Brendan Macken spoke exclusively to GRTV ahead of his time at Kingsholm. The Leinsterman is keen to experience Kingsholm and the rugby heritage at Gloucester.
Gloucester Rugby would like to inform supporters about an exciting opportunity for you to raise money for your chosen charity or chosen cause. 2015 is an exciting year for Gloucester, with Kingsholm Stadium hosting four fixtures for Rugby World Cup 2015.
On loan centre Brendan Macken will make his first start for Gloucester Rugby as the Cherry and Whites resume their Aviva Premiership campaign on Sunday when they take on the Sale Sharks at the AJ Bell Stadium.
Gloucester Rugby are used to repaying their loyal supporters with blistering displays on the pitch, but prop Dan Murphy insists there is now another way to give back with the launch of the Aviva Community Fund.