Led by seamers Matthew Potts and Gus Atkinson, the tourists fought back with the ball after openers Tom Latham (63) and Will Young (42) put on 105 for the opening stand.
However, the hard early work was undone by a flurry of loose shots in the afternoon as six wickets fell for 89 runs at Seddon Park.
Late hitting from Mitchell Santner handed the momentum back to the home side, including a straight six off the day's final ball to raise a half-century.
Santner will resume on 50 not out, alongside the scoreless Will O'Rourke.
England's goal of completing a 3-0 series clean sweep was kept alive by some disciplined seam bowling after putting the Black Caps in to bat.
Potts (3-75) impressed by removing top-scorer Latham and danger man Kane Williamson (44) to celebrate his recall at the expense of Chris Woakes.
The 26-year-old said England had "wrestled" their way back into the game after going wicket-less in the first session.
"In this group the character's real strong," Potts said.
"I think if you notice, there's periods where we do go through a phase of not taking any wickets and we know that if we do stick to our guns and we are meticulous with it, that it will come our way eventually."
Atkinson (3-55) took his career tally to 51 wickets, second only to Australian seamer Terry Alderman's 54 wickets in 1981 for the most Test scalps in a debut year.
Atkinson was among those to benefit from New Zealand's reckless middle-order batting.
Rachin Ravindra (18), Daryl Mitchell (14), Tom Blundell (21) and Glenn Phillips (5) were all caught by fielders on the off-side when failing to keep the ball down.
It reflected a do-or-die approach, with 228 runs -- or 72 percent of their total -- coming through boundaries.
'Outstanding job'
Latham and Young belatedly unearthed the kind of batting resolve largely missing in big losses in Christchurch and Wellington that had put the hosts down 2-0 in the series.
Young fell for his lunch score, caught smartly at second slip by Harry Brook off Atkinson, before Latham edged down the leg side off Potts soon afterwards.
It ended the best opening stand of the seam-dominated series from either team, surpassing the previous best of 18.
The key wicket of Williamson fell soon after tea, playing on in agonising fashion when he failed to kick the ball clear as it ballooned onto his stumps -- prompting a feeling of "pure elation" for Potts.
Veteran bowler Tim Southee, playing his 107th and final Test, delighted supporters at his home ground with a whirlwind 23 off 10 balls.
The 36-year-old bowler struck three sixes to take his career tally to 98 and closer to becoming the fourth player to clear the ropes 100 times in Tests.
Santner said he and Southee deliberately adopted a free-wheeling approach, believing it best suited a pitch offering variable bounce.
"I think Tom and Will did an outstanding job before lunch and I think credit to England, they actually stuck in it for a long time and bowled good areas," said Santner, whose spin could prove important later in the Test.
"There's still enough in the wicket, and a little bit of probably uneven bounce."
