New Zealand debutants Bruce Martin (4/43) and Hamish Rutherford (77 not out) starred to leave England on the brink after day two of the first test in Dunedin.
After England were bowled out for 167 in 55 overs, with Jonathan Trott (45) showing brief the Black Caps took advantage of slack fielding from the tourists to finish on 131 without loss to take an almighty grip on the first test.
Seamer Neil Wagner (4/42) also impressed, claiming the wicket of Kevin Pietersen for a golden duck as New Zealand made up for lost time after the first day wash-out with a stunning performance will bat and ball.
Pietersen's day was compounded when he dropped Rutherford off Stuart Broad, as the opening pair, including Peter Fulton (46 not out) helped the hosts cruise to the close 36 runs adrift of England's woeful first innings total.
Brendon McCullum had inserted England on day one and amid the cold conditions the following morning, his attack made early inroads.
While Alastair Cook settled well after strong opening spells from Tim Southee and Trent Boult, former castled opener Nick Compton (0) in the third over.
Captain Cook (10) found Rutherford at point off Wagner, who trapped Pietersen the very next ball to leave the visitors 18 for 3 with their much feared batting line-up on the brink of collapse.
Ian Bell (24) showed glimpses of the form he showed in the warm-up match with a string of well-timed boundaries, but he too went cheaply as Rutherford took his second dismissal off Wagner.
Both Joe Root (4) and Matt Prior (23) went the same way, and when Trott eventually succumbed to Martin, England at 109 for 7 were staring down the barrel of the worst first innings total against New Zealand.
Broad (10), Steven Finn (20) and James Anderson (23) provided some resistance to help England to 167 all out, with Martin and Wagner seeing to the tail enders.
England were unable to make similarly regular break-through with the ball as their opponents, with Broad and Anderson missing their lines allowing Fulton and Rutherford, who reached his half century in 65 balls, to saunter through to the close without alarm.