National party MPs remain locked in a caucus gathering at parliament house in Wellington which could resolve to turf its leader and give Kiwis a new prime minister.
The most likely candidate is Erica Stanford, the Auckland-based education minister, though she has not confirmed a leadership bid.
The showdown began at 7.30am AEST, called by Mr Luxon as he sought to end speculation over his leadership ahead of a November 7 election.
Key backer Mark Mitchell says he believes Mr Luxon - who has endured poor personal polling and a run of unfortunate gaffes - will survive that meeting and continue on.
However, many political observers are not so sure, with former defence minister Wayne Mapp saying the decision to call the meeting "precipitated this immediate crisis".
"If he wanted to stay in the job he should have just toughed it out," Mr Mapp told Radio NZ.
If a no-confidence vote succeeds, Mr Luxon will be replaced inside three months of the November 7 election.
Radio NZ political editor Jo Moir said the 56-year-old's leadership was "hanging by a thread," while NZ Herald political editor Thomas Coughlan - who broke the story of increased discontent on Monday - said Mr Luxon surviving was "incredibly unlikely".
Mr Mitchell, the police minister, denied this on Wednesday, saying he sat with Mr Luxon until 11pm on Tuesday night "making sure he's in the strongest possible position".
"Discussions will be about calling out (disloyal MPs) and making sure there is loyalty to our leader," hetold Newstalk ZB.
"He's been a great prime minister during very difficult global times ... I'm behind him 110 per cent."
It would be extraordinary and historic if National's 49 MPs voted to move on Mr Luxon.
Unlike Australia, which had four contested prime ministerial changes without an election between 2010 and 2018, New Zealand governing parties tend not to roll their leaders in office.
They last did so in 1997, when National's Jenny Shipley convinced her colleagues to ditch Jim Bolger.
And Kiwis don't seem to like the practice: not since 1940, when Michael Joseph Savage died in office, has the governing party won the following election after a prime ministerial switch.
Adding intrigue to Wednesday's meeting, there is no obvious contender to replace Mr Luxon.
Deputy Leader Nicola Willis, Ms Stanford and Transport Minister Chris Bishop have been mooted as replacements.
No candidates came forward during leadership speculation back in April, when Mr Luxon moved and won a confidence motion to clear the air.
This week's crisis is made even more remarkable by the fact that National is currently in an election-winning position.
The conservative party governs in coalition with the support of free-marketers ACT and populists NZ First.
Almost every poll in recent months shows a decent lead for that right bloc over a left bloc of opposition parties Labour, the Greens and the Maori Party.
The key factor behind National's implosion appears to be their own cratering support, from 38 per cent at the 2023 election to a polling average of about 29 per cent.
Many argue National's popularity slide is down to Mr Luxon, who has shocking personal favourability ratings.
In 2023, Kiwis were enthused by the former executive's business credentials and voted him in after he campaigned to turn around the economy and reduce government debt.
Mr Luxon has failed to land either pledge, and has rubbed many the wrong way with a series of elitist or out-of-touch comments.
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