The Black Caps, playing their first match in the tournament since reaching the 2015 final, dominated their Cricket World Cup group opener at Cardiff's Sophia Gardens.
Karunaratne finished 52 not out off 84 balls, including four boundaries. Karunaratne and Thisara Perera shared a 52-run partnership for the seventh wicket off 51 balls, combining after Sri Lanka slumped to 60-6.
Matt Henry and Lockie Ferguson took three wickets apiece.
Opener Dimuth Karunaratne runs the risk of being stranded as Sri Lanka reached 115-8 after 25 overs against New Zealand in their Cricket World Cup group opener.
Karunaratne is 42 not out with the Sri Lankans set to post a far-below-par total for the fourth-ranked New Zealand to chase.
Karunaratne and Thisara Perera shared a 52-run partnership for the seventh wicket off 51 balls at Cardiff's Sophia Gardens. The pair came together with Sri Lanka on 60-6.
Thisara Perera was out for a 23-ball 27 after holing out to Trent Boult off Mitchell Santner.
Matt Henry and Lockie Ferguson have done the damage as New Zealand reduced Sri Lanka to 80-6 after 17 overs as the Black Caps took control of their Cricket World Cup group opener at Cardiff.
Fast-medium right-armer Henry dismissed Lahiru Thirimanne (4) leg before wicket off the second ball of the day. Henry then had a hat-trick opportunity after Kusal Perera (29) skied a catch to Colin de Grandhomme and Kusal Mendis went for a golden duck in the ninth over, caught brilliantly in the slips by Martin Guptill.
The fiery Ferguson then trapped Dhananjaya de Silva (4) leg before wicket.
Henry took 3-29 off seven overs before being replaced by de Grandhomme, who had Angelo Mathews caught behind without scoring to leave the Sri Lankans in serious trouble. It got even worse when Jeevan Mendis was caught at gully off Ferguson, who has 2-10 in three overs.
Opener Karunaratne is 25 not out.
Matt Henry struck on the second ball of New Zealand's Cricket World Cup group opener against Sri Lanka.
Sri Lanka opener Lahiru Thirimanne was given out leg before wicket after the Black Caps asked for a TV review of the initial not out decision by the on-field umpire, leaving Sri Lanka on 4-1 on a grass-tinged wicket in mostly sunny conditions at Cardiff.
New Zealand skipper Kane Williamson won the toss and sent Sri Lanka in to bat in Cricket World Cup group game against Sri Lanka in Cardiff.
New Zealand was runners-up in the 2015 World Cup and go into the encounter on a four-game winning streak against Sri Lanka.
Sri Lanka has played four ODIs at Sophia Gardens but the three-time finalists are still hunting for their first win at the venue, with defeats to New Zealand (2013), India (2013), England (2016) and Pakistan (2017).
The 1996 champions are coming off back-to-back defeats in warmup games.