South Africa made 174 for eight with JJ Smuts contributing 45 and skipper AB de Villiers striking 46 from 30 balls.
England will feel they should have won after being well- placed but they struggled in the closing overs after losing top scorer Jason Roy.
Opener Roy, who had been struggling for form, led the run chase with a fine 67 before he was given out for obstructing the field when scampering back to his crease, having been sent back by partner Liam Livingstone.
Roy ran across the pitch, placing himself between the fielder and the wicket and Phehlukwayo's return struck his leg, leading to the appeal, which was backed by the umpire's after video review.
Roy had shared a 110-run second wicket partnership with Jonny Bairstow (47) but with 29 needed to win off the final three overs, England fell short.
The hosts required 12 from the final over but Phehlukwayo, bowling yorker length outside the off stump, restricted England to singles off the first three balls and debutant Livingstone was run out after confusion over a second run.
Liam Dawson smashed the penultimate ball for a one-bounce four but the final delivery from the South African seamer beat Dawson and the tourists levelled the three-match series at 1-1.
It had been a strong bowling performance from South Africa with seamer Chris Morris, who removed the dangerous Bairstow after picking up opener Sam Billings early, providing pace and fire in his spell of 2-18 from four overs.
It was an entertaining game for the Somerset crowd, enjoying the first international contest at their ground since the 1999 World Cup.
"It was about the energy and showing the South African never-say-die, attitude...now we have a decider on Sunday" said De Villiers.
England skipper Eoin Morgan had no complaints about the Roy dismissal or the performance of his debutants Livingstone and seamer Tom Curran, who took three wickets.
"We want to see these guys play but we also want to win at the same time," he said.
"It is disappointing to lose given the position we were in but South Africa bowled well at the end," said Morgan.
The deciding match will be played at Cardiff on Sunday.
(Reporting by Simon Evans, editing by Ed Osmond)
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