Tackle-shedding centre Izaia Perese starred as the Waratahs overturned a 17-point first-half deficit to keep their finals hopes alive on Saturday.
Despite the defeat, there were still joyous celebrations for Moana Pasifika as cancer survivor and former Wallabies playmaker Christian Lealiifano joined rarefied air as only the seventh player to rack up 1000 points in Super Rugby.
Two conversions and a pair of penalty goals pushed Lealiifano to 1001 career points in the competition, propelling the ex-Brumbies star into elite company alongside rugby greats Dan Carter (1708), Morne Steyn (1488), Beauden Barrett (1275), Elton Jantjies (1140), Bernard Foley (1095) and Stirling Mortlock (1036).
But it was the Waratahs who claimed the precious four competition points after a spirited fightback at Mt Smart Stadium.
Almost as quickly as the Tahs raced to a 17-0 in last week's impressive win over the Crusaders, they trailed 17-0 following two tries in six minutes from Moana.
First prop Abraham Pole crashed over in the 14th minute, then centre Levi Aumua crossed as the competition newcomers threatened a boilover.
The Waratahs kept their cool, though, to strike back through Perese and hooker Dave Porecki to trail 17-14 at the break.
Exciting winger Dylan Pietsch and versatile forward Jed Holloway also enhanced their prospects of a Wallabies call-up as the Waratahs completed the revival in a thrilling second half.
Perese looked to have set up one of the tries of the year for Pietsch straight after the interval, only for the TMO to intervene.
In a cruel break, replays revealed Pasifika winger Timoci Tavatavanawai stepped in to touch two phases earlier before losing possession, rendering the try null and void.
Instead of taking the lead, NSW found themselves further behind after Lealiifano slotted his history-making second penalty goal that nudged the flyhalf past the 1000-point barrier.
But a beautiful long ball from halfback and captain Jake Gordon to winger Mark Nawaqanitawase put the Waratahs ahead for the first time in the 54th minute.
Minutes after pulling off a desperate try-saving tackle on opposite number Tima Fainga'anuku, Pietsch couldn't be denied a second time when the former sevens ace finished off a fabulous team try that featured 12 players.
Moana had a chance to snatch victory at the death but the NSW try-line defence held firm as the Waratahs posted their first win in New Zealand in seven years.
Moana Pasifika 20 (TRIES: Abraham Pole, Levi Aumua, CON: Christian Lealiifano 2, PEN: Christian Lealiifano 2 ) Waratahs 26 (TRIES: Izaia Perese, David Porecki, Mark Nawaqanitawase, Dylan Pietsch, CON: Tane Edmed 2, Ben Donaldson). HT: 17-14
MOANA PASIFIKA: 1. Abraham Pole, 2. Ray Niuia, 3. Sekope Kepu, 4. Veikoso Poloniati, 5. Samuel Slade, 6. Michael Curry, 7. Solomone Funaki, 8. Henry Time-Stowers, 9. Ereatara Enari, 10. Christian Leali’ifano, 11. Timoci Tavatavanawai, 12. Henry Taefu, 13. Levi Aumua, 14. Tima Fainga’anuku, 15. Danny Toala
RESERVES: 16. Luteru Tolai, 17. Ezekiel Lindenmuth, 18. Joe ‘Apikotoa, 19. Alex McRobbie, 20. Jack Lam, 21. Jonathan Taumateine, 22. Lincoln McClutchie, 23. Solomone Kata
WARATAHS: 1. Angus Bell, 2. Dave Porecki, 3. Archer Holz, 4. Jed Holloway, 5. Geoffrey Cridge, 6. Will Harris, 7. Charlie Gamble, 8. Rahboni Warren-Vosayaco, 9. Jake Gordon, 10. Tane Edmed, 11. Dylan Pietsch, 12. Lalakai Foketi, 13. Izaia Perese, 14. Mark Nawaqanitawase , 15. Alex Newsome
RESERVES: 16. Tom Horton, 17. Te Tera Faulkner, 18. Ruan Smith, 19. Hugh Sinclair, 20. Langi Gleeson, 21. Jack Grant, 22. Ben Donaldson, 23. Triston Reilly