Two women had to run for their lives and five other people were trapped overnight when a huge slip peeled off the side of Mt Underwood in Fiordland.
Tuesday's slip has blocked the Te Anau-Milford highway and will take many days to clear.
New Zealand Transport Agency spokesman Murray Clarke said the 150-metre slip peeled rock, mud and forest "like a carpet" from hundreds of metres up the steep flanks of Mt Underwood, about 5km from Milford Sound, the Southland Times reported today.
Two women walking along the road watching spectacular waterfalls cascading down the mountainside suddenly heard a louder roar and saw water and soil coming off the mountain.
"We didn't look back ... we just sprinted and didn't stop until we could be sure we were safe," Iben Hall told the newspaper.
She said she and her friend turned around once they were well clear and were stunned to see a mass of rocks, mud and crushed trees beside where they had begun their dash.
Milford Lodge manager Richard Sands told the newspaper the pair had been dropped off by five other Milford residents in a van.
The others had meanwhile driven on and were about 2km up-valley looking at the river when they heard the slip. They returned immediately only to find the road blocked.
The five had spent a cold, wet night trying to sleep in their van in the Chasm carpark and had crossed the slip on foot early next morning, describing it as a tangle of huge smashed trees and knee-deep mud, with some of the road still visible.
Mr Clarke said the slip was beside the site of a massive 1993 landslide which took about a fortnight to clear.
The new slip was only one-third as big, Mr Clarke said.