The Waratahs fought back from 14 points down at half-time to snatch a 30-27 victory over the Blues in Sydney on Sunday.
After trailing 24-10 at the interval, home fly-half Bernard Foley slotted a last-minute penalty to claim a comeback win for the under-pressure hosts.
First-half tries from hooker James Parsons, fly-half Chris Noakes and full-back Charlie Piutau put the Blues, who were seeking their first win in Sydney in ten years, firmly in control.
But the 'Tahs came roaring back in the second period, outscoring their visitors 20-3 after the interval as full-back Israel Folau and Foley added to Drew Mitchell's first-half score.
It was only the battling Waratahs' second win of the season, while the Blues fell to 2-2 this campaign.
Foley only took over the goal-kicking duties after scrum-half Brendan McKibbin was forced off with a shoulder injury 30 minutes in and kicked two conversions and two penalties from his four attempts along with a 64th minute try that levelled the scores.
Wallabies winger Mitchell put the Waratahs in front in the seventh minute after leadup work from McKibbin and former rugby league international Folau.
But the visitors from Auckland scored the next three tries through Parsons, pouncing on an error by Mitchell after a Waratahs line-out, Noakes from close range and Piutau off a dreadful handling error by replacement scrum-half Matt Lucas.
Noakes kicked the Blues to a commanding 14-point lead at the break, which was the biggest half-time deficit the Waratahs had conceded in six years.
But the Waratahs turned around the match, with Folau scoring off a forward-looking Lucas pass and Foley plunging over to level the scores.
Folau butchered a try four minutes from time and Foley missed a drop-goal attempt, before Blues lock Culum Retallick was penalised for offside and presented Foley with his match-winning penalty attempt from 36 metres out.
"We made it hard on ourselves in the first half. We started strong and played some good rugby but let them back into the game through knocking off and not working hard enough," said Waratahs skipper Dave Dennis.
"The second half was pleasing. They're a good side and to get that win means a lot for our group and helps us going forward."
Blues skipper Ali Williams lamented his side's poor second period.
"Individually we made too many mistakes and we couldn't apply the pressure over the distance," he said.
"Frustrating: it is what is when you get to Sydney, though, it's a hard battle."
The Waratahs will host Western Force in an Australian derby next Sunday, while the Blues have a New Zealand derby with the Chiefs in Mount Maunganui on Saturday.
Tries: Mitchell, Folau, Foley
Cons: McKibbin, Foley 2
Pens: McKibbin, Foley 2
Tries: Parsons, Noakes, Piutau
Cons: Noakes 3
Pens: Noakes 2
Waratahs: 15 Israel Folau, 14 Peter Betham, 13 Adam Ashley-Cooper, 12 Rob Horne, 11 Drew Mitchell, 10 Bernard Foley, 9 Brendan McKibbin, 8 Pat McCutcheon, 7 Michael Hooper, 6 Dave Dennis (capt), 5 Kane Douglas, 4 Sitaleki Timani, 3 Paddy Ryan, 2 John Ulugia, 1 Benn Robinson. Replacements: 16 Luke Holmes, 17 Sekope Kepu, 18 Mitchell Chapman, 19 Jed Holloway, 20 Matt Lucas, 21 Ben Volavola, 22 Tom Kingston.
Blues: 15 Charles Piutau, 14 Frank Halai, 13 Rene Ranger, 12 Francis Saili, 11 George Moala, 10 Chris Noakes, 9 Piri Weepu, 8 Peter Saili, 7 Luke Braid, 6 Steven Luatua, 5 Ali Williams (capt), 4 Culum Retallick, 3 Charlie Faumuina, 2 James Parsons, 1 Tom McCartney.
Replacements: 16 Quentin MacDonald, 17 Angus Ta'avao, 18 Anthony Boric, 19 Brendon O'Connor, 20 Jamison Gibson-Park, 21 Baden Kerr, 22 Jackson Willison.
Venue: Allianz Stadium, Sydney
Referee: Francisco Pastrana (Argentina)
Assistant referees: Steve Walsh (Australia), Will Houston (Australia)
Television match official: Peter Marshall (Australia)