Nigel Redman's side, which included three Wasps; Hugo Ellis, Joe Simpson and Mark Odejobi, had outperformed every previous junior England team by reaching a first Junior World Championship final, winning all nine games this season and completing a Six Nations Grand Slam in the process.
But the number one seeds weathered the early pressure, then kept the scoreboard ticking over with penalties before their increasingly dangerous runners struck with Kade Poki, Jackson Willison, Andre Taylor and Ryan Crotty all scoring tries.
England replied with Alex Goode's solitary first half penalty and despite some bright spells - Miles Benjamin and Jordan Turner-Hall both threatening - they couldn't put any more points on the board, particularly after flanker Calum Clark was sent-off for striking an opponent.
The Under-19 champions scored first, a Renata penalty in the fifth minute, but England shaded the opening 15 minutes of a tense kicking battle, earning penalty chances in the eighth and 11th minutes that Goode could not put away.
The dominance ended there, though, as New Zealand's efficient lineout gave them the platform to offload and unleash their dangerous runners, with Crusaders wing Poki coming inside to score the opening try in the 17th minute with Renata converting.
England worked their way downfield for Goode to get them on the board in the 25th minute but the remainder of the half was an increasingly tough defensive operation as the Junior All Blacks chipped through the blitz defence, aimed cross-kicks wide and offloaded out of the tackle.
However, they added only a solitary Daniel Kirkpatrick penalty moments before Peter Fitzgibbon's half-time, giving England time to reorganise during the break.
There was more urgency about their attacking work from deep, but Renata added two more penalties early in the second half before Redman made changes with Ben Youngs, Billy Moss and Scott Hobson all given time to make an impact.
Willison ended their chances of finding a way back into the game, though, when he squeezed over on the left past Luke Eves after two midfield rucks.
England managed to apply some pressure going into the final 10 minutes though, Turner-Hall's break forcing Aaron Smith to kill the ball and earn a yellow card.
The advantage evaporated almost instantly when Clark was dismissed for striking as his side caught and drove to within a couple of metres of the line.
His teammates kept on moving forward, only to be punished down the right as Andre Taylor was judged to have grounded the ball after regathering his own kick ahead, Kirkpatrick converting.
The embarrassment was increased when Ryan Crotty got away down the left - after a promising England attack broke down - to add a fourth try with Kirkpatrick again successful from out wide.
Under 20 coach Nigel Redman stepped down at the conclusion of the IRB Junior World Championship paying tribute to the players who had taken England to their first-ever final.
Victories over Australia and South Africa took sixth seeds England into a first-ever final at this level and ensured them of an easier route to the knock-out stages when the Junior World Championship is staged in Japan next summer.
Mark Mapletoft will lead the side there as head coach, assisted by Martin Haag, as Redman is moving to a new role at Twickenham as the RFU's Elite Coach Development Manager.
"We're very disappointed but we this season and this tournament has been awesome for us and we've achieved a lot," said Redman.
"We've beaten Australia and South Africa in the last week but New Zealand was a game too far for us.
"We have worked hard at our attacking game all season and it was disappointing that we couldn't get that going today, but they've been a terrific group of players to work with all season and they deserve a lot of credit.
"We've won a Grand Slam and a Triple Crown, beaten the number three seeds Australia and the number two seeds South Africa, reached a world final for the first time and scored more than 40 tries in doing so. All in all it's been a great season."
Wasps and England U20s Captain Hugo Ellis said: "New Zealand are a fantastic side and were the better team on the day, but credit to our guys for what they've achieved this season.
"We've had two great victories in a week to get here but we maybe suffered a bit today and there were some heavy legs out there from the guys who scrummed so strongly against South Africa and Australia.
"This season has been a fantastic stepping stone for young players and some of them have developed remarkably over the course of the season.
"I take my hat off to them for what they've achieved and I hope as many as possible go on to greater things."
Redman added: "Today doesn't remove the fact that this has been an awesome season for England at this Under 20 level and I'm sure a lot of them will go an awfully long way."
England U20: Noah Cato (Saracens); Mark Odejobi (London Wasps), Luke Eves (Bristol Rugby), Jordan Turner-Hall (Harlequins), Miles Benjamin (Worcester Warriors); Alex Goode (Saracens), Joe Simpson (London Wasps); Nathan Catt (Bath Rugby), Joe Gray (Northampton Saints), Alex Corbisiero (London Irish), Ben Thomas (Saracens), Gregor Gillanders (Leicester Tigers), Jon Fisher (London Irish), Calum Clark (Leeds Carnegie), Hugo Ellis (London Wasps, captain).
Replacements: Ben Youngs (Leicester Tigers) for Simpson 45, Billy Moss (Bath Rugby) for Corbisiero 55, Scott Hobson (Cornish Pirates) for Gillanders 55, Rob Miller (Newcastle Falcons) for Eves 61, Matthew Cox (Worcester Warriors) for Ellis 65, Scott Freer (Leeds Carnegie) for Gray 70, Seb Stegmann (Harlequins) for Odejobi 77.
Scorers: Penalty: Goode.
Sent-off: Clark 71.
New Zealand: Trent Renata; Kade Poki, Jackson Willison, Ryan Crotty, Zac Guildford; Daniel Kirkpatrick, Grayson Hart; Paea Fa'anunu, Ash Dixon, Ben Afeaki, Chris Smith (captain), Sam Whitelock, Peter Saili, Luke Braid, Nasi Manu.
Replacements: Aaron Smith for Hart 58, Sean Maitland for Renata 60, Josh Townsend for Whitelock 66, Rodney Ah You for Fa'anunu, Hugh Reed for Saili 72, Quentin MacDonald for Dixon 73, Andre Taylor for Poki.
Scorers: Tries: Poki, Willison, Taylor. Conversion: Renata. Penalties: Renata 3, Fitzpatrick
Yellow card: Smith 70.
Referee: Peter Fitzgibbon (Ireland).