Leading 12-0 after 20 minutes, the Waratahs looked on course for easily their biggest scalp of the season before the Hamilton-based outfit reeled off five consecutive tries to turn the contest on its head.
Chiefs playmaker Damian McKenzie was in sizzling touch and had his fingerprints on everything as his team took control via midfield domination.
The Waratahs have only won twice this season - both times against the Crusaders - but could have moved into the top eight with a victory on Friday night.
Down 12-0 early, the Chiefs soared over the Waratahs in the second half. (Dean Lewins/AAP PHOTOS)
Three Chiefs tries in the 20 minutes after halftime meant that wouldn't happen.
First McKenzie put winger Emoni Narawa away, then halfback Cortez Ratima exploited sloppy defending soon after, before a bruising run from No.8 Wallace Sititi effectively locked in the points.
Lachie Swinton dragged a try back to give the Waratahs some late hope, before Chiefs counterpart Kaylum Boshier flashed serious pace to snuff that completely.
The Chiefs go third on the ladder, but could slide to fourth if the ACT Brumbies beat the Blues on Saturday.
Having weathered an early storm, the Chiefs would perhaps have been the happier team at halftime with the sides tied at 12-12.
The Waratahs produced a barrage in the opening 20 minutes in which they crossed twice and forced so many penalties referee Jordan Way sent Chiefs second-rower Tupou Vaa'i to the sin bin for repeated fouling.
NSW hooker Julian Heaven dashed off the back of a broken maul to score the opening try while halfback Jake Gordon produced a similar move for 12-0.
But the Chiefs struck back through fullback Shaun Stevenson - who injured his hamstring in scoring - Â before a superb lofted ball from playmaker Damian McKenzie put winger Emoni Narawa through.
Chiefs winger Etene Nanai-Seturo also served 10 minutes off the field for a high shot on Mark Nawaqanitawase, although questions were asked of referee Way's non-call on a brutal late hit Samipeni Finau put on Tane Edmed.
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