The England team of Jason Kenny, Philip Hines and Kian Emadi could not match the pace of Kiwi trio Eddie Dawkins, Sam Webster and Ethan Mitchell.
The winning time of 62.527 seconds is a new Commonwealth Games record.
Earlier, Australia's Anna Meares won her seventh Commonwealth medal as she took gold in the women's 500m time trial, in a new Games record time.
The 30-year-old clocked 35.435 seconds in the last heat to edge compatriot Stephanie Morton into the silver medal spot.
Mears sprints to time trial goldEngland's Jess Varnish - up against Morton in her heat - went round in 34.267 to take bronze.
English duo Danni Khan and Victoria Williamson finished sixth and seventh respectively, while Eleanor Richardson took eighth with fellow Scot Jenny Davis ninth.
Varnish and Morton were quick in the penultimate heat but not fast enough to beat favourite Meares, who flew through the final heat to claim gold in style.
The win takes her to five Commonwealth gold medals and seven overall, to take her level with Kathy Watt as Australia's most successful female Commonwealth Games cyclist.
Manchester 2002: Bronze in women's sprint
Melbourne 2006: Gold in women's 500m time trial; silver in women's sprint
Delhi 2010: Gold in women's sprint; gold in women's team sprint; gold in women's 500m time trial
Glasgow 2014: Gold in women's 500m time trial
She has the chance to claim that crown for herself when she races in the track sprint later this week.
That event preceded the men's team sprint final, which featured three English cyclists who had disappointed in qualifying for the individual sprint earlier on Thursday.
And they came up against a New Zealand team who had dominated the world at the Track Cycling World Championships in February and March and were in equally dominant form here to claim gold.
In the bronze medal match, Australia beat Canada.
Meares (centre) was too quick for compatriot Morton (left) and England's Varnish (right) 
Varnish claimed her first Commonwealth Games medal in the women's 500m time trial 
Emadi, Kenny and Hindes claimed silver in the team sprint to add to England's healthy medal haul on day one 
England trio Emadi, Hindes and Kenny recorded a time of 61.776 seconds in the final as world champions New Zealand continued to dominate
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