The Magic owned a seven-point advantage with 5:30 to play, but Denver rallied to win its third straight game. Orlando has lost 10 in a row.
Denver jumped in front thanks to an 8-0 run and eventually opened a five-point cushion, but Orlando climbed within two on a 3-pointer by Arron Afflalo with 36 seconds to play.
Iguodala then hit his key basket to give Denver some breathing room. Denver shot just 43 percent from the field, but grabbed 18 offensive rebounds to stay in the game.
Jameer Nelson produced 20 points for the Magic, who have two games left on a four-game road trip.