The Knicks had been in charge of the contest at Madison Square Garden and led by 14 points with 2:51 left in the game before the Pacers suddenly came alive.
In stunning fashion, Indiana sank six straight three-pointers, five of them from Aaron Nesmith.
The Pacers were an inch away from winning the game in regulation when, with the final play of the fourth quarter, Tyrese Haliburton backed out of the three-point arc and his shot while back-pedalling hit the rim and bounced in.
The Pacers, who had been 17 points down at one stage in the fourth, celebrated what they thought was a famous victory.
But the video replay showed that Haliburton’s foot was on the three-point line and the shot was downgraded to a two-point shot, meaning the game went to overtime.
The stunned Knicks stuck with the task and led by a point with 35.2 seconds of overtime remaining when Jalen Brunson made a driving, floating jump shot.
But a lay-up from Andrew Nembhard and then a six-foot dunk from Obi Toppin secured a thrilling win for the Pacers.
Haliburton top-scored for the Pacers with 31 points and 11 assists while Nesmith ended with 30 points on 8-from-9 three-point shooting.
Brunson top-scored for New York with 43 points while Karl-Anthony Towns added 35 points.
The win was the Pacer’s fourth comeback from 15 points or more down during the post-season.
Game two of the series takes place in New York on Friday. (AFP)
