Stephen Jones scored all Wales' first half points, and the dragons went into the interval with a 9-6 lead, before a second half onslaught of 23 unanswered points put paid to any hopes of a home win.
Tries by Ma'a Nonu and Jerome Kaino killed off the hosts' hopes of pulling off a stunning triumph after a thrilling opening half display which more than matched the world's No1 team.
But after Nonu's vital touch down in the 55th minute, Dan Carter showed just why he is short listed to be IRB player of the year.
He kicked 19 of his side's 29 points, and put fellow player of the year hopeful Shane Williams in the shade.
This was a true heavyweight contest between the current Grand Slam champions and the Tri Nations winners.
Wales went in search of ending 55 years of hurt with their first victory with added spice off the field with Kiwi Warren Gatland pitting his wits with former dragons coaches Graham Henry and Steve Hansen.
Gatland had suggested there would be a response from his players to the Haka and after Ryan Jones led his men out to an incredible atmosphere, they lined up for a two-minute stand-off before kick-off.
Bread of Heaven rung around the Millennium Stadium and Wales were on the front foot immediately.
Gatland's men took the lead in the second minute when Lee Byrne was caught by a high tackle from Ma'a Nonu and Stephen Jones duly converted.
The Wales fly-half fired the underdogs into a six-point lead with his second successful kick after 13 minutes but mega-star Carter reduced the deficit four minutes later with a routine penalty.
But it was the hosts who were dominant in territory and possession and Jones cashed in with a superbly struck third penalty from the touchline in the 23rd minute.
The dragons, as they were against South Africa, looked lively in attack but Lee Bryne's dangerous break failed to secure the first try as the ball evaded the on-rushing Leigh Halfpenny.
And Wales were punished through penalties from Carter either side of half-time after two mistakes from Alun Wyn Jones to bring the scores level.
New Zealand raised the tempo after the break and their pressure told when Nonu touched down for a simple score from Keven Mealamu's pass.
Gatland replied with a double switch in a bid to re-ignite the dragons by throwing on half-back pair James Hook and Dwayne Peel for Jones and Gareth Cooper.
But Carter kept the visitors foot on the accelerator and increased the margin to 13-points with his fourth and fifth successful penalties before Kaino sealed victory for the All Blacks.