Eddie Dawkins, Sam Webster and Ethan Mitchell clocked 42.877sec to edge the English and earn redemption after a disappointing sixth at last month's world championships in the Netherlands.
The victory last night topped off two silvers from two earlier finals, in which the New Zealand women were well beaten both times by Australia.
Bryony Botha, Rushlee Buchanan, Kirstie James and Racquel Sheath won New Zealand's first medal of the Games in the team pursuit at the Anna Meares Velodrome.
Natasha Hansen and Emma Cumming also finished second, beaten by Kaarle McCulloch and Stephanie Morton in the team sprint.
The Australians, who set a Games record of 32.578sec in qualifying, went even faster in the final, clocking 32.488sec to Hansen and Cumming's 33.115sec.
The Kiwi women's team pursuit quartet were completly outpowered, overtaken by Australia on the last lap and eventually finishing nearly 10sec behind.
Alexandra Manly, Annette Edmondson, Ashlee Akudinoff and Amy Cure clocked 4min 15.214sec for their second Games record of the night after topping qualifying with 4min 17.218sec.
Sheath said afterwards the New Zealanders had tried to focus on their own race, rather than chasing the Australians.
"We knew Aussie were the team to beat from the get-go - they had an insane build-up for this, and it was everything for them.
"We just went out there and gave it everything we had. We knew we just had to go as fast as we could, but unfortunately it wasn't enough."
The New Zealand men's team pursuit squad was disqualified from last night's bronze medal ride after one of the team's bikes was found to be in breach of regulations.
The team unsuccessfully appealed the decision.
The bike was found to be non-compliant by officials for having an incorrect cockpit height.
A maximum height of 100mm is allowed and the New Zealand bike came in at 105-106mm.
The team's high-performance director, Martin Barras, said the blame ultimately lay with him and he apologised.