Kyle Lowry scored 23 points and DeMarre Carroll had 14 in his Raptors debut. Luis Scola, who didn't score against his former team, was the only Raptors starter not to reach double figures.
Toronto has won its last five games against Indiana.
Paul George had 17 points, 12 rebounds and eight assists for the Pacers, who led by 16 in the second quarter but couldn't hold on. George Hill scored 19 points, and C.J. Miles had 18.
Toronto's Terrence Ross opened the fourth with a four-point play and Bismack Biyombo followed with a three-point play as Toronto scored the first eight points of the quarter to take an 80-68 lead.
But Indiana battled back to take a 95-93 lead with 2:18 left. Monta Ellis scored six straight points for the Pacers, including a pair of free throws, George added a jumper off an inbounds pass and Ian Mahinmi added a key layup.
Valanciunas answered with a tip-in and DeRozan made a three-point play as Mahinmi fouled out, putting the Raptors up 98-95 with 1:29 remaining.
George was fouled as he banked in a jumper at the other end, but missed the free throw, with DeRozan grabbing the rebound. After a Toronto timeout, DeRozan made a pull-up jumper to give the Raptors a three-point edge with 50 seconds left. Toronto sealed it by making six of eight at the line.
Toronto had almost as many turnovers at the half (12) as it did made baskets (14). After falling behind 41-25 on a pull-up jumper by Stuckey with 4:43 left in the second, the Raptors closed the half with a 12-4 spurt, cutting it to 45-37 at the break.
Pacers: Indiana's last win over Toronto was an 86-79 victory at Indianapolis on Jan 7, 2014. ... Hill and George were whistled for technical fouls in the fourth.
Raptors: Toronto went 7 for 15 at the free-throw line in the first half. ... The teams combined for 11 turnovers in the first quarter, six by Toronto.
Pacers: Host the Grizzlies on Thursday night.
Raptors: Visit the Celtics on Friday night.