The National leader called a crunch meeting of his partyroom for Wednesday morning to end speculation around his future.
Many tipped a leadership change after NZ Herald reported growing dissatisfaction in Mr Luxon's performance, three months out from the November 7 election.
Instead, Mr Luxon emerged victorious after a near three-hour meeting, claiming to have united the party and pledging to win a second term for his conservative coalition.
"There was a confidence vote in my leadership this morning at our caucus meeting and I have the full support of our caucus," he said, in a 75-second appearance without taking questions.
"Now we're going back to work and we're moving on."
Mr Luxon, 56, has led a three-party coalition since 2023 of his centre-right National party, free-marketers ACT and populists NZ First.
The outcome of Wednesday's meeting is a carbon copy of an April showdown, when Mr Luxon prevailed after calling an emergency caucus meeting and confidence vote after reported grumbles.
The margin of each vote is a tightly-held secret, though media outlets have reported the April result was 27-22 in Mr Luxon's favour.
Helping the prime minister's cause was the failure of detractors to settle on a rival ticket, with no candidates declaring as challengers on either occasion.
Wellington newspaper The Post reported Erica Stanford, the education minister, firmed as a possible alternative.
The 48-year-old has not confirmed this, and was served a brutal backhander by colleague Nicola Grigg, the minister for women, on the way to the meeting.
"She's a good friend of mine but she's not a prime minister," Ms Grigg said.
Most observers tipped a successful spill, with one political editor describing Mr Luxon's leadership as "hanging by a thread" on Tuesday night and another rating his survival as "incredibly unlikely", making this victory a defiant and triumphant moment for Mr Luxon.
Mentored by party messiah John Key, the 56-year-old former Air New Zealand chief executive enjoyed a meteoric rise in politics, entering parliament in 2020, becoming opposition leader in 2021 and winning the 2023 election.
However, he has endured a tough run in the top job, failing to deliver on key campaign pledges to improve New Zealand's misfiring economy and tackling government waste.
His corporate communication style is routinely mocked, and his poor personal popularity is widely seen as a key reason behind National's plunging poll fortunes, from 38 per cent at the election, to a poll average of 29 per cent.
A run of gaffes in the past month brought about the second leadership vote.
Mr Luxon told battling small business owners in Rotorua they were "negative" and should instead be "retooling and radically disrupting your business".
He also defended his use of a defence force plane to fly home after a party fundraiser - a shocking look for a leader who forced to return a housing entitlement to stay at his own mortgage-free property.
Mr Luxon has also been pushed around by NZ First leader and foreign minister Winston Peters, who caused outrage by telling a China-born Greens MP to "go back to your own country" in parliament last month.
While Mr Luxon said the 81-year-old maverick's comment was racist, he did not sanction or sack him, leaving him liable to the charge he tolerates racism.
Despite all the drama, the National-led coalition remains on course to win re-election on November 7.
While the race is tight, and complicated by upstart party Opportunity polling above the five per cent threshold to enter parliament, the right bloc has consistently kept an edge over the left bloc of Labour, the Greens and the Maori Party.
