New Zealand hold a slight advantage after an absorbing second day of the first Test on which James Anderson became the fourth England bowler to reach 300 Test wickets.
The hosts lost their last six wickets for 40 runs as they were bundled out for 232, with Tim Southee taking 4-58.
Anderson then brought a packed Lord's crowd to its feet by removing New Zealand openers Hamish Rutherford and Peter Fulton in quick succession to join Sir Ian Botham, Bob Willis and Fred Trueman
in the 300 club.
"It's roughly the same situation as England were in. It could go either way tomorrow. Ross Taylor has played with more class than anyone on either side. England could have done better - too many people got starts and didn't go on."
But New Zealand fought back through Ross Taylor, who scored 66 off 72 balls, and Kane Williamson, whose unbeaten 44 steered the tourists to 153-4 at the close - trailing by 79.
"It's in the balance, but I'd say they just have the edge," Anderson told BBC Sport. "We didn't build on yesterday as well as we would have wanted to.
"We started well with the ball but let it slip. They counter-attacked very well and we have a lot of hard work to do to keep us in the game."
Taylor said: "We toiled hard yesterday and got the results this morning. We would have taken this at the start of the day."
Williamson was dropped on 23 by wicketkeeper Matt Prior, who had a day to forget as he also fell for a golden duck in the week he was named England Cricketer of the Year.
With New Zealand's potentially explosive skipper Brendon McCullum also unbeaten at the close, the Black Caps will have high hopes of securing a first-innings lead.
England, meanwhile, will aim to spark a collapse similar to the one they suffered after making a steady start through Yorkshire duo Joe Root and Jonny Bairstow.
Anderson reaches England landmark
Southee began the rout by strangling Root down the leg side for 40 before trappng Prior lbw next ball.
Stuart Broad was plumb lbw as he played across the line and Graeme Swann feathered an outswinger from Neil Wagner to wicketkeeper BJ Watling.
Steven Finn missed a straight ball from Southee, who claimed his fourth victim when he held on to a sharp return catch to remove Bairstow.
Anderson, who finished the March series in New Zealand on 298 Test wickets, wasted little time in claiming the two scalps he needed for 300.
Both wickets were vintage Anderson, with Rutherford and Fulton prodding at balls that moved away and edging into the slips.
England's top Test wicket-takers
Ian Botham - 383 wickets, average 28.40
Bob Willis - 325 wickets, average 25.20
Fred Trueman - 307 wickets, average 21.57
James Anderson - 301 wickets, average 30.41
Derek Underwood - 297 wickets, average 25.83
Statistics correct at close of play on 17 May
At 7-2, New Zealand were in danger of implosion, only for Taylor to launch an impressive counter-attack.
stripped of the captaincy last year,
he played with a positivity that contrasted starkly with the cautious approach of England's batsmen, and when he crashed Anderson for successive fours shortly before tea, it was the first time in the match that two boundaries had been scored in the same over.
His partnership with Williamson had reached 93 when it was broken by Anderson, who got the second ball of a new spell to nip back into Taylor's pads.
England's hopes of another swift breakthrough were thwarted by a rare error from Prior, who put down a one-handed chance at a straightforward height to his right.
The partnership was worth 47 when Finn, who was largely wayward on his home ground, speared one through Brownlie's defences to have him lbw for 23, the original not-out call successfully overturned on review.
The wicket could have exposed McCullum to a testing spell before the close, only for bad light to end play 20 minutes early.
This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.