Michigan won on Illinois' home floor for the first time in 14 tries.
Hardaway made 6-of-7 from the field and 9-of-10 from the foul line while scoring 25 points -- 18 in the second half.
The Michigan lead was only two with 12:16 to play but the Wolverines then ran off nine points in a row to take command.
Trey Burke added 21 points for Michigan (22-8, 12-5 Big Ten Conference). It was the fifth win in six games for the Wolverines, who can still earn a share of the league regular-season title.
For that to happen Michigan needs to win at Penn State Sunday and have Ohio State defeat Michigan State on the road. Such a scenario would create a three-way tie for first place among Michigan, Ohio State and Michigan State.
Meyers Leonard led Illinois (17-13, 6-11) with 18 points and nine rebounds. The Fighting Illini have lost 10 of 12.