It was the fifth straight Memphis win, inching the Grizzlies a game over the .500 mark.
After Lee gave Memphis a 91-88 lead with his foul shots, DeMarcus Cousins brought the Kings within one by hitting a jumper.
Marc Gasol missed a jump shot for Memphis with 18 seconds left and Sacramento took over, but a loose ball in the closing moments resulted in a jump ball that Memphis controlled.
Mike Conley led Memphis with 25 points, Lee had 17 and Gasol added 16 to go with four blocks.
Cousins led Sacramento with 22 points and 17 rebounds. Rudy Gay scored 19 for the Kings, who have lost two out of three.