New Zealand’s top batsmen were returned to the pavilion with alarming alacrity as Stuart Broad and Jimmy Anderson took five wickets with only 36 runs on the broad.
But Watling and de Grandhomme's 142 established a record sixth innings partnership against England. The pair's tally was one run better than Martin Crowe and Adam Parore's feat which was set 24 years ago.
The resistance was ended when Broad took his fourth wicket of the match to remove de Grandhomme for 72.
"It was probably the best rhythm I've felt for a couple of years,” said Broad. "Watling didn't really give us a chance. He and de Grandhomme played exceptionally well but from our point of view we held them well enough.”
Watling was 77 not out at the close of play with New Zealand on 192 for six in reply to England's first innings total of 307 all out.
Jonny Bairstow was the star of the England knock. He made 101 after sharing in a 95 run eighth wicket stand with Mark Wood.