The couple, which is in the country for a state visit with son Prince George, joined separate crews from New Zealand's America's Cup sailing team to race around Auckland harbour.
The two Brits were given control of their boats when they hit open water and the Duchess, who previously worked as a deckhand on a number of sailing boats in 2001, triumphed over her husband in two races.
The skipper of Prince William's boat, which suffered problems with its sails, says, "William was a good sailor but Kate pushed us around into a bad position... William was very competitive right from the start - he didn't want to lose. When Kate won both the races he just said 'At least she'll be happy'."
The couple previously took part in an aquatic race in 2011 when the Prince won a dragon boat race ahead of his wife during a visit to Canada.