Trailing just 12-10 at the break, and with the match there for the taking, Otago failed to stay with a Taranaki side which played well above itself in the second spell.
The loss killed off Otago's slim play-off hopes in the Air New Zealand Cup.
The home side was accurate, resolute in defence and took every opportunity which came its way in the second stanza.
It looked dangerous with the ball in hand, was aggressive at ruck and maul time, and kicked intelligently when needed.
In contrast, Otago failed to break through, dropped ball at critical time, and ended up playing catch-up rugby, which did not suit the greasy conditions, which worsened as the game went on.
It was not as though Otago was terribly woeful, but Taranaki just got on a roll which most sides would have found hard to stop.
The match turned - as they often do - on the five minutes either side of half-time.
Otago first five-eight Glenn Dickson was stopped - partly by a head-high tackle - as he was going for the line at the end of the first half.
He ended up with the ball against the post but replacement referee Chris Morrison ruled no try and went back to a penalty for the tackle.
Dickson slotted the kick but the side went into the shed behind.
Otago came out well in the second half but after a wave of attacks near the line, lock Hayden Triggs dropped the ball 5m from the line, and Taranaki pounced.
The ball was quickly moved to winger Nathan Hohaia, who in passed to centre Paul Perez, and he ran 50m to score.
That gave Taranaki a nine-point lead, and three minutes later the home side pulled further ahead when prop and skipper Tony Penn barged over from a Taranaki rolling maul.
Momentum was well and truly with Taranaki and Penn picked up a further try with a nice step after a good back move.
Replacement forward Nemia Soqeta grabbed a a bonus point six minutes from time with a 20m run down the touchline.
Otago was well gone by then, and although it did go close a couple of times in the second half, it never looked likely once the home side got its head of steam.
Hooker Jason Macdonald was pushed out by the corner flag after a nice line-out move 15 minutes into the second half and the ball was turned over at an attacking line-out near the end.
Otago had started well, with lock Tom Donnelly almost scoring within the first minute.
Shortly afterwards, halfback Sean Romans got across the line to score, sneaking down the blindside after a line-out steal from Adam Thomson.
Romans had a good match, along with winger Ryan Shortland, who looked dangerous every time he got the ball, while Triggs and prop Sam Hibbard tried hard.
But the best players all were from the home side, which will hope its final 40 minutes will continue for the rest of the season.
Otago v Taranaki
In New Plymouth
Taranaki 38 - Tony Penn 2, Paul Perez, Nemia Soqeta tries; Willie Ripia 3 conversions, 4 penalty goals
Otago 10 - Sean Romans try, Glenn Dickson conversion, penalty goalHalf-time: 12-10.
