The catamaran eventually settled on its side, resting on its port hull with three sailors suspended in the airborne starboard hull.
Helmsman Peter Burling said he, skipper and wing trimmer Glenn Ashby and Simon van Velthooven remained in the boat while Andy Maloney, Blair Tuke and Josh Junior were thrown into the water.
Burling said the capsize "was fully our error" as the boat accelerated and got high on its foils. He said the crew would review video to see what precisely went wrong.
He said it was too early to know if the shore team would be able to fix the boat in time for today's two scheduled races.
"As a group of New Zealanders, we are incredibly resilient," Burling said. "We'll bounce back from this. At some stage we'll get the boat back to 100 per cent but we're still assessing damage."
The catamaran was righted and the damage appeared to be extensive, particularly to the wing sail. There could also be damage to the boat's electronic systems.
British skipper Ben Ainslie, who crossed the starting line ahead of New Zealand, pulled up as soon as he realised what happened. Ainslie radioed to his support boat to go back and help the Kiwis.
The race was black-flagged, with Ainslie's Land Rover BAR awarded the point. He trails the Kiwis 3-1 in the best-of-9 series.
Team New Zealand damaged its wing sail before the day's first race and went back to shore to swap it out. The Kiwis made it to the start line in time and passed Land Rover BAR late in the race to win by 2m 10s.
Ainslie said it appeared Burling made a slight misjudgment on rake and angle. "But all of us sitting here aren't going to pass criticism," he said during a news conference. "These boats are incredibly hard to sail and these things can happen.
"Thank God, most importantly, everyone's fine on the boat. I'm sure they'll recover from that and be out there tomorrow or the next day."
Weather watch
The forecasters are saying conditions today are likely to be worse than yesterday when winds gusted into the high 20 knots.
The limit for racing is 24 knots, so this will be music to the ears of the Team New Zealand shore crew who were expected to be working overnight to repair the damage to their yacht in time for today's races.
Term of the day
Pitch-pole is when a yacht's bow digs into the water and the vessel turns end over end.
Quotes of the day
"That was very careless. They [Team NZ] should know not to run into another set of foils' wake at a shallow angle. Turbulence, aeration and the vorticity off the leading foil set will totally disrupt the normal flow patterns. Plenty of aircraft have been flipped 'A over T' by tip vortexes."
- Legendary British yacht designer Hugh Welbourn
"I was very thankful when I was sitting up top to be able to look out the back and see all their heads above water and know they're all safe."
- Team NZ's Peter Burling
Tweet of the day
I'm no sailing nuff, but I laugh at people saying 24kn is "nothing". Maybe, but if boats can get to 45+kn in those conditions, it's a lot. @GuyHeveldt
Get up for the Cup
Team New Zealand's first race against BAR is at 5.08am today with the series' sixth race scheduled for 6.06am. SoftBank Team Japan race Artemis at 5.36am, with their sixth race at 6.35am.
