The Cavaliers, who lost 133-99 at Toronto on Thursday, led by 22 after the first quarter Friday yet still fell to 0-3 against the Pacers this season.
Collison hit 9 of 11 shots, and Domantas Sabonis contributed 12 points and a team-high 15 rebounds for the Pacers.
Pacers guard Lance Stephenson, who had 16 points and 11 rebounds, made a driving layup with 3:13 left to cut Cleveland's lead to 95-93. Oladipo sank a 3-pointer to give the Pacers a 96-95 lead with 2:10 to go.
The score remained the same when Oladipo missed a 21-footer with eight seconds left and Love grabbed the rebound.
James stepped out of bounds on a drive to the basket with less than two seconds left. Collison hit one of two free throws with 1.4 seconds remaining to make it 97-95. James missed a 3-point attempt at the buzzer.
Indiana outscored Cleveland 32-16 in the third quarter to erase a 14-point halftime deficit and take a 76-74 lead after three quarters.
"We played so hard on the defensive end," Stephenson told Fox Sports Indiana after the game. "We took our time and made the right plays and got the W."
Stephenson tied it with a 3-pointer at 74-all late in the third. Collison then gave the Pacers their first lead since 6-4 with a 19-foot pull-up jumper with 10.8 seconds left in the quarter.
Trailing 6-4, Cleveland used a 22-0 run to take a 26-6 lead in the first quarter. The Pacers hit 14 of 20 shots to help them outscore the Cavs 32-24 in the second quarter and narrow the halftime deficit to 58-44.
The Cavaliers hit 13 of 22 shots to hold a 34-12 advantage after the opening quarter.
Sabonis started in place of Myles Turner, who missed his second consecutive game with a sore right elbow.
--Field Level Media