Local triathlete Osborne was leading after the 1km swim in Tikitapu (Blue Lake), but Shaw took the lead during the 26km mountain bike in the Whakarewarewa Forest.
The men's race then came down to an 11km run which featured two laps around Blue Lake.
Currie overtook Shaw on his way to victory after coming off the bike second. Osborne, who was third off the bike, produced the fastest run of the day but could not quite pull in Currie.
Osborne crossed the finish line in a state of absolute exhaustion and said he had given everything he could.
"That was all I had. I mean my race plan when I went out on the run was, what can I lose, just leave it all on the course," he said.
"I would have loved to have won it, I don't think a local has won it before."
Osborne is a top road triathlete and seldom competes in off-road races.
He said both he and Shaw went to Western Heights High School together and it was nice to get one over the fellow Rotorua athlete.
Last year's Xterra New Zealand champion Conrad Stoltz (South Africa) was entered to race at the weekend but had to withdraw at the last minute because of an illness.
Champion Currie appeared to be in relatively good shape after crossing the finish line on Saturday and said it was a good race, but a very challenging mountain bike ride.
Rain on Friday night made the mountain bike course extremely slippery and muddy.
"It was slick out there and a lot of mud so some real challenging riding."
It was the first time he had entered Xterra New Zealand.
Shaw said he was reasonably happy to finish third, but was a bit disappointed not to finish higher after leading into the run.
In the women's race, Snyder's victory was 12 years in the making. The Xterra veteran claimed her first big win as a professional.
"It feels awesome, and it's about time. It only took me 12 years," she said. "That bike course was a ton of fun but gnarly in the mud."
Snyder's winning time of 2:32:29 was less than one-minute faster than Lizzie Orchard (Auckland). Rachel Challis finished third not far behind Orchard.
Rotorua's Lydia Hale finished seventh in the women's race and first in her age group.
