The Blues secured their fourth straight win at home in Auckland when they beat the Waratahs 21-13 at Eden Park on Friday.
The result moves the Blues up from 11th place in the standings to 8th while the Waratahs remained in fourth place.
The victory is the Blues fourth from nine matches this season and moved them above the Highlanders in the New Zealand conference. The Highlanders are on tour in South Africa so the Blues are likely to remain above the Dunedin based franchise this week.
Waratahs kicker Bernard Foley got the visitors within 7 points in the final 10 minutes of the match but then Blues first five Simon Hickey kicked a late penalty which took the hosts lead back to eight points so the Sydney side leave Auckland with no additional points in the standings.
At the end of a week in which the focus has been on the sudden return to rugby league of their high-profile code-hopper Benji Marshall, the Blues outscored the Sydney-siders two tries to one.
But in a game that did not reach great heights, the Blues struggled throughout to hold the ascendency while the Waratahs had ample possession but suffered from multiple handling errors and had two tries disallowed.
It was the Blues' fourth win of the season, all of them at Eden Park, and ended a two-match losing streak after they were beaten by the Hurricanes and Brumbies in recent weeks.
"The boys really know how to play well at home. We were at a bit of a low point after losing those two games but we had to win this one and we did," relieved captain Luke Braid said.
The win lifted the Blues ahead of the Highlanders in the New Zealand conference.
The Highlanders still have to play the competition-leading Coastal Sharks in South Africa this weekend.
The Waratahs, with five wins, remain second on the Australian ladder, one point ahead of the Western Force who play the Northern Bulls on Saturday.
The Waratahs produced the pressure in the first half but a succession of handling errors meant it was the Blues that produced the points, turning with an 8-3 lead.
A penalty to Simon Hickey was followed by a try to Lolagi Visinia, who won the ball for the Blues when he outleaped Michael Foley to field a high kick and then finished the move by fielding a long pass from Ma'a Nonu to score in the corner.
The only reward for the Waratahs in the first 40 minutes was a Foley penalty after missing two close flirtations with the line.
In the opening minute Adam Ashley-Cooper sliced through the Blues defence, only for Rob Horne to be tackled just short of the line.
Horne later dotted down by the posts only to be brought back 55 metres for a knock on.
The Blues stretched their lead to 18-3 early in the second half with a second Hickey penalty and a converted try to Francis Saili.
Jacques Potgieter eventually scored for the Waratahs at the end of a sustained build-up, with Foley adding the conversion and a second penalty to close the gap to 18-13 before a third Hickey penalty sealed the outcome.
Final Score Blues 21 (8) Waratahs 13 (3)
Tries - L. Visinia, F. Saili
Pen - S.Hickey 3
Con - S.Hickey
Tries - J.Potgieter
Pen - B.Foley 2
Con - B.Foley
Referee: Chris Pollock
Assistant Ref 1: Nick Briant
Assistant Ref 2: Mike Lash
TMO: Glenn Newman
15. Charles Piutau,14. Frank Halai,13. Francis Saili,12. Ma'a Nonu,11. Lolagi Visinia,10. Simon Hickey,9. Bryn Hall,8. Peter Saili,7. Luke Braid,6. Jerome Kaino,5. Tom Donnelly,4. Patrick Tuipulotu,3. Charlie Faumuina,2. Keven Mealamu,1. Tony Woodcock
Replacements :16. James Parsons,17. Sam Prattley,18. Angus Ta'avao,19. Hayden Triggs,20. Piri Weepu,21. Steven Luatua,22. Ihaia West,23. Pita Ahki
1. Benn Robinson , 2. Tatafu Polota Nau , 3. Sekope Kepu , 4.Will Skelton , 5. Kane Douglas , 6. Jacques Potgieter , 7. Michael Hooper , 8. Dave Dennis (c), 9. Nick Phipps , 10. Bernard Foley , 11. Rob Horne , 12. Kurtley Beale , 13. Adam Ashley-Cooper , 14. Cam Crawford , 15 Israel Folau .
Replacements (one to be omitted): 16. Tolu Latu , 17. Jeremy Tilse , 18. Paddy Ryan , 19. Pat McCutcheon , 20. Wycliff Palu , 21. Brendan McKibbin , 22 Jono Lance , 23. Matt Carraro 24. Stephen Hoiles