The All Blacks, beaten for the first time in their history by Argentina at the weekend, have slipped to third in the new World Rugby rankings which were released on Monday.
Reigning world champions South Africa stay top ahead of England. France remain fourth.
This is only the second time that New Zealand, who were world number one for 507 weeks between 2009 and 2019, have tumbled so low.
They dropped to third in the world after their defeat by England in the semi-finals of the 2019 World Cup in Japan but were quickly back to second place after beating Wales and winning the bronze medal.
The All Blacks’ defeat at the weekend was met with shock at home and has raised the pressure on under-fire coach Ian Foster.
Wales, hammered by Ireland on Friday for a sixth successive defeat, have slipped to ninth, their worst ranking since 2012.