With the scores locked at 19-19 after 79 enthralling minutes, Dan Carter's drop goal had just enough behind it to scrape over Ireland's bar and give the world champions - playing with 14 men at that stage - the win.
Ireland had raced into a 10-0 first-half lead, but relied on the boot of Jonathan Sexton to get them back on level terms in the second half.
And, when New Zealand lost Israel Dagg to the sin bin with 72 minutes gone, Ireland looked strong favourites, only for Carter to have the last word and give his side an unassailable 2-0 lead in the three-match series.
"I'm gutted all right," O'Driscoll told Sky Sports 2.
"We got back on level terms and to concede the way we did is disappointing.
"Out performance was massively improved from last week and I'm very proud of the lads.
"We let ourselves down in the first Test and we spoke about that, we spoke about the jersey and concentrating on our own game, but the scoreline still says an All Blacks win which is difficult to take considering the effort we put in."
While O'Driscoll was disappointed, New Zealand skipper Richie McCaw was relieved to get away with the win.
He conceded his side had produced an error-strewn performance, though.
"It was a typical old arm wrestle," he said.
"We made mistakes, let them get momentum and that went against us. We gave the ball away but at the end we're happy to get away with a win.
"We didn't match Ireland how we wanted. We made mistakes and these guys make you play.
"We have got things to work on, but we recovered our composure, forced a mistake and got the win."
Gilbert has released a new line of rugby cleats. The Gilbert Virtuo 8S is part of the exciting new product. Check it out.
The Barbarians are one of the top invitational rugby sides with a long history and classic rugby jersey.
The Nike Tiempo is a solid rugby cleat and one of few styles still made from full-grain natural leather.
The Lions get ready for their matches with this green training jersey. It's what the players wear. Get in the Gear!
A cool looking all black rugby cleat with the high performance adidas is known for. Get in the Gear!
Wear the crest of the British and Irish Lions on your t-shirt. A great look for the summer.
The Lions are ready to get their Australia tour underway. They arrive in Perth on Monday.
The New Zealand All Blacks training jersey for 2013/14. Get in the Gear!
The USA Rugby Pro Alternate rugby jersey is perfect for any fan of the Eagles. Get yours to wear during the summer Test matches.
The NEW All Blacks 2013/14 jersey has arrived at World Rugby Shop. Dare to wear the colors of the All Blacks.