After leaping out to a handy 22-10 lead at halftime, the Blues were given a fright as the Highlanders flew out of the blocks in the second half.
Tries to first five-eighth Mitch Hunt and loose forward Shannon Frizell gave the Highlanders an unlikely 24-22 lead and temporarily silenced the 27,000 strong Eden Park crowd.
A yellow card to star centre Rieko Ioane compounded the situation for the Blues as the Highlanders piled the pressure on.
A second try to Dalton Papalii in the 57th minute put the Blues back in the front and the game could have gone either way in the final quarter.
The Highlanders had a chance to snatch victory in the closing minutes with a lineout close to the line. Youngster Hoskins Sotutu played the spoiler by holding up the Highlanders ball carrier and causing a turnover to end the Highlanders chances.
Next week, The Blues have a bye before returning to action in round five against the Crusaders in Christchurch. The Highlanders are back on home turf against the Crusaders next Saturday.
WATCH: Full match highlights HERE.
Blues 27 (Caleb Clarke, Dalton Papalii 2, Rieko Ioane tries, Otere Black 2 con, pen) Highlanders 24 (Ash Dixon, Shannon Frizell tries, Mitch Hunt try, 3 con, pen)