Jordan Rapana grabbed a brace, as the Kiwis scored three tries to two to run out deserved winners.
The Kiwis attack was impressive, but it was their resilient defence in the opening 20 minutes that set the platform for the win.
Jason Taumalolo was immense, playing the whole first half and all but six minutes of the second.
Issac Luke also had one of his best games of the season, while Kevin Proctor and Tohu Harris never stopped on either edge.
The Kiwis were trying to overcome a poor record against the hosts on English soil, having won only two of the last seven encounters between the two sides.
Indeed, the Kiwis had never beaten England in the Northern Hemisphere since the inception of the Four Nations, with losses in 2007, 2009 and 2011.
They were also facing a revitalized England team; reinforced by Sam and Tom Burgess, who both missed the 2-1 series win over the Kiwis last year, and the presence of master coach Wayne Bennett, returning to the international arena for the first time since the 2008 World Cup.
But in the end the Kiwis simply wanted it more; they made some critical errors at vital times but were good enough to defend them, especially in the last 20 minutes.
England made the better start, with Gareth Widdop kicking a penalty in the second minute, after the home side dominated the opening exchanges.
The Kiwis, in particular captain Jesse Bromwich, were frustrated by some of the interpretations of local referee Robert Hicks, clearly different from an NRL style.
The first 20 minutes continued the pattern from Perth; New Zealand looked hesitant and disorganized on attack, epitomized by Bromwich tripping over Thomas Leuluai as the Kiwis worked a set play.
England edged the forward battle in the first quarter, and deservedly extended their lead with another Widdop penalty, after the five eight had been caught high by Johnson.
Only some dogged defence kept the visitors in the game, with Thomas Leuluai and Solomone Kata coming up with big plays when their team needed it most.
England prop James Graham was centimetres away from a try - ruled double movement - while speedy winger Jermaine McGilvary was denied twice by strong defence.
The Kiwis got into their stride in the last 15 minutes of the half, off the momentum provided by Martin Taupau and Adam Blair.
Taupau's charges were immense, at one point scattering the England defence with a 40 metre run through the heart of the ruck.
The replacements also brought their offloading game - and as the Lions defence started to stretch - the Kiwis scored their first try through Jordan Rapana.
After consecutive repeat sets, Shaun Johnson found Jordan Kahu behind a decoy runner and the fullback sent Rapana to the corner for his first test try.
The Kiwis extended their lead early in the second half, with Johnson snaffling a trademark intercept and running 70 metres to score, while many of the crowd were still taking their seats after halftime.
Crucially, the Kiwis couldn't complete the next set - Luke found guilty of coughing up the ball, though the referee could have easily found a penalty on another day - and a McGilvary try brought the home side back into the game.
Some individual brilliance from Rapana - who beat three defenders after running off a Manu Ma'u offload took the Kiwis back into the lead in the 57th minute, though Kahu's conversion attempt from a handy angle hit the post.
But again, they couldn't complete the set, with fifth tackle disorganization leading to Johnson kicking out on the full.
The home side had momentum again, roared by a ferocious capacity crowd, and Ryan Hall crossed in the corner after a sustained passing movement.
With 20 minutes to play it was anyone's game, but in the end Johnson close range field goal was enough.
New Zealand 17 (J Rapana 2, S Johnson tries. J Kahu 2 goals, Johnson field goal)
England 16 (J McGilvary, R Hall tries, G Widdop 4 goals)
Halftime: 6-4