Dale Steyn produced a stunning display of death bowling to rescue South Africa and secure a two-run victory over New Zealand in the World Twenty20.

The master paceman finished with figures of four for 17 and held his nerve when the Black Caps needed seven to win from the final over and three from the last delivery.

As it was he conceded only four from the 20th over, bowling with express pace and full control before running out Ross Taylor with the final ball to end the match.

Without his intervention the Proteas were staring at a second successive defeat and near-certain elimination.

Ultimately, it was hard luck on Taylor, who made a fine 68 from just 37 balls that looked certain to win the game for his side until Steyn's late heroics.

His innings was only just put in the shade by South Africa's JP Duminy, whose unbeaten 86 laid the foundation for Steyn's heroics. 

The Proteas innings started quietly, reaching 39 for two from six powerplay overs, and seemed to be heading for trouble when AB de Villiers was third man out, castled by Nathan McCullum.

That brought Hashim Amla and Duminy together and the pair played important, but entirely different knocks.

Amla played cautiously as he scored at around a run-a-ball throughout his innings of 41, falling in bizarre fashion when a punch down the ground struck his partner's bat with the ball looping up to give Corey Anderson an unlikely return catch.

Duminy, though, was irrepressible as he struck 10 fours and three sixes and scored freely all around the ground.

His fireworks helped South Africa add 70 in the last five overs, setting a considerably higher total than had seemed likely for much of the innings.

The New Zealand response began with promise, with openers Kane Williamson and Martin Guptill putting on a positive 57 in seven overs.

Two big overs – Williamson taking on Morne Morkel and Guptill following suit against Lonwabo Tsotsobe – did the heavy lifting before Guptill was hustled out by Albie Morkel for 22.

It got worse for New Zealand when talismanic skipper Brendon McCullum was stumped chasing an Imran Tahir wide in vain, but Williamson brought up his 50 in 31 balls to keep things ticking along nicely.

He found much-needed support in Taylor, who clubbed three consecutive sixes off Morne Morkel to take a big chunk out of the target.

But the return of Steyn had the desired effect as Williamson was well caught by De Villiers.

As he prepared to bowl the last six balls, New Zealand appeared to have the game won but Steyn had other ideas as he sent down a fierce over that accounted for Luke Ronchi and, finally, Taylor.