The Highlanders have taken a vital step in their pursuit of a Super Rugby Pacific finals berth, outlasting the Crusaders in Dunedin in another Southern Derby thriller.

The hosts emerged 32-29 winners in front of more than 17,000 fans on what was a timely show of attendance for New Zealand Rugby, after a bumper crowd had earlier turned up to see the Blues defeat the Hurricanes in Auckland.

The Highlanders jumped out to an early 10-0 lead and then enjoyed a 12-point buffer later in the first half, before the defending champions rallied to close the gap to 26-22.

But fly-half Cam Millar's fifth and sixth penalty goals gave Clarke Dermody's side the breathing space it needed, even with Macca Springer's late five-pointer.

The Crusaders outscored their opponents three tries to two, but Millar's 22 points from the tee kept the scoreboard ticking over; the playmaker also crossing for a try in a personal 27-point haul.

It was the Highlanders' first win over their great rivals in more than three years and leaves the Crusaders' own finals hopes hanging by a thread.