The All Blacks produced a dazzling display and were ahead of the Lions in just about every department, with the defeat leaving the tourists staring down the barrel of a 3-0 series whitewash.
Fly-half Daniel Carter took centre stage with a 33-point haul that included two tries, five penalties and four conversions, but his job was made all the easier by New Zealand's dominance up front.
Tana Umaga, Sitiveni Sivivatu and Richie McCaw also crossed as the All Blacks ran riot in Wellington with a mesmerising performance - their fourth in row - which makes them heavy favourites for the 2007 World Cup.
Gareth Thomas and Simon Easterby touched down for the Lions with the boot of Jonny Wilkinson doing the rest, but apart from a powerful opening 10 minutes it was all one-way traffic in an unhappy night for the cream of British and Irish rugby.
It looked a different contest early on as the Lions made a stunning start and crossed with just one minute 33 seconds on the clock with Thomas gliding through the All Blacks' midfield and touching down under the posts.
Wilkinson converted and then saw a penalty hit the left upright after a magnificent break from Wales scrum-half Dwayne Peel set up the initial field position, but Carter made no mistake in the ninth minute.
Gavin Henson executed a try-saving tackle on Rico Gear in the right corner as the balance of power shifted in New Zealand's favour and Carter slotted a penalty to confirm their ascendancy.
They took the lead in the 13th minute after pouncing on an error in the Lions' backs, Carter coming up with the ball and setting off on a 30-yard dash - shrugging off a Henson challenge in the process - before supplying the scoring pass to Umaga.
Carter converted the try he created and swapped penalties with Wilkinson, who then sent another between the posts, but the All Blacks stretched their lead in the 34th minute when good hands from Aaron Mauger sent Sivivatu over.
New Zealand led 31-13 three minutes after the interval as Carter turned on the style, slotting his fourth penalty and improving a try he scored with a piece of individual brilliance.
The Canterbury Crusader - put into space down the right wing by number eight Rodney So'oialo - chipped ahead, escaped the Lions' cover and completed the move by diving on his own kick.
Flanker Easterby forced his way over in the left corner but substitute Stephen Jones - on for Wilkinson - missed the extras and Carter raced over in the 70th minute to put the result beyond doubt.
Inspirational openside McCaw was shoved over as the Lions' defence slipped up late on, completing the scoring and leaving the tourists with the task of salvaging some pride in next Saturday's final Test in Auckland.