The Pacers went on a 13-0 run late in the fourth quarter to forge a 99-99 tie and knotted the contest again at 101-101 when David West corralled an offensive rebound and followed with a layup with 38 seconds left.
Then on the game's final play, Denver's Andre Miller lobbed a pass toward the rim for Iguodala, who drew a foul from Paul George that incensed the Pacers.
He sank the first free throw then purposely missed the second, forcing the clock to expire for the victory -- the Nuggets' 10th in 12 games.
George led Indiana with 23 points and 10 rebounds and Lance Stephenson added 20 and eight for the Pacers.
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