New Zealand gave coach Graham Henry the perfect start to his reign as England suffered at Dunedin's "House of Pain."
N Zealand: 36 (30)
Tries: Spencer, Rokocoko, Howlett
Cons: Carter 3
Pens: Carter 5
England: 3 (3)
The All Blacks cut the world champions to pieces with a stunning first-half display before England fought back without reward after the interval.
Tries from Carlos Spencer, Doug Howlett and Joe Rokocoko helped the home side to a 30-3 half-time lead, a Charlie Hodgson penalty England's sole reply.
Daniel Carter kicked 21 points as the All Blacks cruised to a commanding win.
Henry's decision to beef up his pack was rewarded in spades with Jono Gibbes and Xavier Rush playing major roles alongside the outstanding Richie McCaw in a dominant back row.
England, by contrast, looked laboured and weary and will do well to do avoid a 2-0 series defeat in Auckland next Saturday.
The All Blacks started at break-neck pace with Rokocoko gliding past three tacklers with a slashing break straight from the kick-off.
England were fortunate not to concede a try when New Zealand prop Kees Meeuws failed to release the ball with a huge overlap outside him.
The ferocious early exchanges saw Danny Grewcock - sent off on the same ground in 1998 - and All Blacks prop Carl Hayman exchange punches.
Carter rewarded the home side's pressure with a penalty after five minutes and only Josh Lewsey's composure under a high kick from Spencer averted a try.
England appeared to have weathered the early storm when Hodgson settled his nerves with a penalty to draw the visitors level in the 13th minute.
Spencer scored the opening try
But two minutes later the All Blacks scored the opening try with a devastating move after Matt Dawson's kick was charged down.
The ball was moved swiftly right where Spencer released Howlett before looping round the wing to touch down in the right corner.
Carter's touchline conversion put New Zealand 10-3 ahead and as England's line-out malfunctioned their plight worsened 10 minutes later.
Another brilliant All Blacks counter-attack ended when McCaw fed Rokocoko, who cut inside Hodgson's weak tackle and the remaining cover to score.
With Carter kicking the extras to make it 17-3, England were staring down the barrel with less than half an hour gone.
They should have reduced the deficit with a penalty after a cynical Spencer infringement, only for the award to be overturned when Ben Cohen vented his frustration at referee Jonathan Kaplin.
Instead England's position became even more parlous as the New Zealand back three pounced for a third time.
Mils Muliaina and Rokocoko worked the ball to Howlett, who rounded Hodgson to score in the right corner.
Carter converted and added two further penalties to leave England 30-3 adrift at half-time.
Coach Sir Clive Woodward made a double change at the interval, sending on Joe Worsley for Chris Jones and Steve Borthwick for Grewcock.
The visitors did enjoy more possession on the resumption, but were repelled by New Zealand's superb defence and Spencer's relieving boot.
Instead two more Carter penalties edged the All Blacks even further in front as Woodward sent on four more replacements to try to stem the tide.
England pressed hard in the final quarter but their efforts went unrewarded.
New Zealand: M Muliaina; D Howlett, T Umaga (capt), D Carter, J Rokocoko, C Spencer, J Marshall; K Meeuws, K Mealamu, C Hayman, K Robinson, C Jack, J Gibbes, R McCaw, X Rush.
Replacements: A Hore, T Woodcock, J Collins, M Holah, B Kelleher, N Evans, S Tuitupou.
England: J Lewsey; J Simpson-Daniel, M Tindall, M Catt, B Cohen; C Hodgson, M Dawson; T Woodman, S Thompson, J White, S Shaw, D Grewcock, C Jones, R Hill, L Dallaglio (capt).
Replacements: M Regan, M Stevens, S Borthwick, J Worsley, A Gomarsall, S Abbott, O Barkley.
Referee: Jonathan Kaplan (South Africa)