The home side had slumped to 28 for three but skipper Craig Cumming led a magnificent fightback with a superb century as Otago recovered to reach 288 for seven.
The 33-year-old anchored the innings with a knock of 106 from 130 deliveries, including 16 fours.
He looked at ease from the moment he arrived at the crease and reached his third one-day 100 without offering a genuine chance.
English import Dimitri Mascarenhas had a fine day with the ball and surprised Canterbury when he took the new cherry.
He bowled his allotment of 10 overs on the trot and survived an awful pounding early when Iain Robertson and Michael Papps were blazing away.
But the hard-hitting all-rounder stuck to his task and took three for 42 to help break the back of Canterbury's chase in the State Shield match.
Nathan McCullum also had a good game for his province, scoring his highest one-day score, 71, off 55 balls.
Otago's bonus-point win lifted it to 17 points, outright third behind leader Northern Districts on 21 and second-placed Central Districts on 18.
"I thought we showed a lot of strength in character after being three for not many and still playing positively," Otago coach Mike Hesson said.
"Craig was obviously a big part of that but Nathan McCullum also did well to score 71 to help turn the game. We also fought back with the ball after they were 60-odd without loss, so I'm delighted."
Former Black Caps spearhead Shane Bond produced a devastating opening spell, bowling Brendon McCullum with an inswinging yorker and removing in-form opener Shaun Haig with a similar delivery.
Greg Todd added to Otago troubles when he gloved a short delivery from Ryan Burson through to the wicketkeeper, leaving Otago's innings in tatters.
Cumming quickly found his timing with some nice drives which raced to the boundary as he helped rebuild the innings with Black Cap Neil Broom.
Broom, along with Brendon McCullum, caught an early flight from Napier to play in the match after having turned out for the Black Caps on Tuesday in the series-deciding one-dayer against the West Indies.
Broom played a lovely lofted drive for six but on 19 chopped a delivery from Carl Frauenstein just as his partnership with Cumming was starting to flourish.
Still, the pair added 65 for the fourth wicket.
Nathan McCullum joined Cumming and eased a drive through extra cover for four to bring up Otago's 100 as the home side slowly emerged from the hole it had dug itself - a very ordinary shot compared with some of the more remarkable ones to come.
He gave a crowd of about 500 a taste when he played a reverse sweep for four off Robertson.
But it was not until Otago took the batting power play in the 43rd over the spectators got to see his full range of shots.
Looking every bit like his younger brother, Brendon McCullum, Nathan unleashed with an array of power hitting and unorthodox strokes, including a towering six over midwicket which shattered a car windscreen.
He raised his 50 with a lofted straight drive for six and guided the next delivery for four down to third man to help Otago plunder 58 off the five-over spell.
Perhaps his best shot was when he dropped to one knee and swept a delivery over fine leg for six.
But, having played nicely, he ran himself out when he inexplicably continued to run up the wicket having charged the bowler and missed.
The Canterbury captain and wicketkeeper, Kruger van Wyk, calmly threw the stumps down.
Having been dropped twice and survived a certain run out when Peter Fulton's throw missed its target, Mascarenhas whacked a six and two fours in his brief innings of 28, and Ian Butler finished the innings off in style with two straight sixes over the sight screen.
Canterbury's chase began well, but stalled after the dismissals of Papps and Robertson.
Andrew Ellis offered some resistance, making 33 before Canterbury's miserable innings closed at 163.
Scoreboard
OTAGO
S Haig b Bond 1
B McCullum b Bond 1
G Todd c van Wyk b Burson 9
C Cumming lbw b Frauenstein 106
N Broom b Frauenstein 19
N McCullum run out 71
D Mascarenhas c Robertson b Bond 28
I Butler not out 32
D de Boordernot out 11
Extras (2b, 4lb, 4w) 10
Total (for 7 wkts, 50 overs) 288
Fall: 1/2, 2/7, 3/28, 4/93, 5/180, 6/227, 7/249
Bowling: S Bond 10 overs, 1 maiden, 52 runs, 3 wickets (1w); R Burson 10-1-55-1; A Ellis 10-1-72-0 (1w); C Frauenstein 10-0-45-2 (1w); J Myburgh 7-1-40-0; I Robertson 3-0-18-0 (1w).
CANTERBURY
I Robertson c Broom b McMillan 30
M Papps b Mascarenhas 27
P Fulton c B McCullum b Mascarenhas 2
J Myburgh c N McCullum b Mascarenhas 1
S Stewart lbw b Butler 22
C Anderson c de Boorder b Butler 7
C van Wyk c Cumming b N McCullum 14
A Ellis c Cumming b N McCullum 32
C Frauenstein c Butler b McMillan 9
S Bond c Haig b N McCullum 6
R Burson not out 2
Extras (6lb, 4w, 1nb) 11
Total (for 10 wkts, 39.5 overs) 163
Fall: 1/59, 2/61, 3/62, 4/81, 5/92, 6/109, 7/113, 8/129, 9/158.
Bowling: D Mascarenhas 10-0-42-3 (2w); N Wagner 8-1-42-0; J McMillan 8-0-32-2 (1w, 1nb); I Butler 8-1-20-2 (1w); N McCullum 5.5-0-21-3.
Result: Wint to Otago by 125 runs
