Diaw's free throw with 14 seconds left put the Bobcats in front and they survived a missed jumper at the buzzer by Cleveland's Anthony Parker. Diaw tied the score 97-97 with 1:49 to play by scoring on a hook shot.
Charlotte stayed within one game of Indiana in the race for the final playoff spot in the Eastern Conference. Indiana maintained its narrow advantage with a 111-101 win over Detroit.
The Bobcats won their fourth in a row, getting 26 points from Diaw. He made 11-of-16 from the field and received support from Kwame Brown with 16 points and Gerald Henderson with 14.
Cleveland was unable to build on its shocking victory over Miami Tuesday. The Cavaliers appear headed for the worst record in the NBA, having won 15 times with eight games left to play.
Ramon Sessions scored 24 points to lead Cleveland.