The Highlanders looked to be in cruise-control mode when they opened up a commanding 24-0 lead at halftime after outside centre Malakai Fekitoa scored two tries and wing Waisake Naholo crossed once.
But the Blues, who ended a seven-match losing streak by winning their first game of the season last weekend, stormed home in the second term, scoring four unanswered tries.
Inside centre George Moala and lock Patrick Tuipulotu both crossed in the first 10 minutes then Keven Mealamu came off the bench and scored two late tries to give the Blues a chance of snatching victory.
The only points the Highlanders managed in the second half were two penalties from flyhalf Lima Sopoaga, who kicked six from six on the night.
The Highlanders remain fifth on the table and in contention for the playoffs while the Blues are effectively out of the running in 13th place.
“We started well but lost some momentum in the second half,” Otago captain Nasi Manu said in a televised interview.
“The Blues came out a different team in the second half and played well but credit to our boys, they hung in there.”
Original source: Highlanders hold off Blues attack