The study observed 2635 children and adults in outdoor spaces in Wellington - including beaches, playgrounds and outdoor pools - between September 2014 and April 2015.
Only 4.3% of people wore sun protective hats - such as broad-brim, bucket and legionnaire-style hats.
Only 10% were under shade at times when sun protection was warranted.
The research, which is published in the New Zealand Medical Journal today, is part of the landmark Kids' Cam Study, funded by the Health Research Council of NZ, in which children captured images of their world from wearable cameras.
Health Promotion and Policy Research Unit director Louise Signal said the findings suggested children and adults were less sun-safe in recreational settings than previously believed.
New Zealand had the highest rate of melanoma in the world.
Every year, nearly 90,000 skin cancers are diagnosed and 500 people die.
Department of Public Health researcher Ryan Gage said New Zealand should learn from Australia and "do more to encourage sun protection in general, both for children and adults".
"The Sunsmart Schools programme alone is not enough to influence behaviours outside school grounds.
"Sun burning is highly common in outdoor recreational areas, and sun damage at any age contributes to skin cancer risk."
Prof Signal said encouraging local councils to develop sun safety policies would be a useful first step for supporting sun protection in outdoor recreation spaces.