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.
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