Outteridge, who is an Olympic gold medallist in the physically demanding 49er skiff, slipped and shot off the back of his "flying" high-tech catamaran as it went through a high-speed, g-force manoeuvre on Bermuda's Great Sound.
The two crews, who are going head-to-head in their quest to take on America's Cup holders Oracle Team USA, fought three fascinating duels in their catamarans.
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New Zealand showed the same slick consistency they have done throughout the challenger series, keeping their 50-foot (15 metre) foiling catamaran above the water for much of the time.
But after making a crucial error in the first race and allowing New Zealand to get past them, Artemis Racing sailed a near perfect race in their second encounter to level the series.
Artemis Racing managed to stay on their foils for the whole of the second race, while New Zealand kept their hulls flying out of the water for 99.9 percent of the time.
Outteridge had outsmarted his long-standing rival Peter Burling at the start and the crew of six elite sailors managed to fend off New Zealand's repeated attempts to pass them.
But in the last race, when they also made the better start, the loss of Outteridge overboard threw the crew and they were unable to get back up to speed and conceded defeat.
Burling said such mishaps were "part of it", adding: "I felt like even if he (Outteridge) didn't fall off we would have got that gate (course marker) off him".
Outteridge was left stranded in the water, from where he was later picked up by a support boat.
The next races are due to take place on Sunday.
"I think he was a bit upset with what happened to be honest," Paul Goodison, a member of the Artemis Racing team, said on BT Sport television after the race, adding that the crew had won three starts and were confident of beating New Zealand.
The winner of the series will challenge Oracle Team USA in the Louis Vuitton America's Cup Match next week.
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