Villanova (29-4), the No. 2 seed in the East Region, will play seventh-seeded Connecticut (27-8) in the third round Saturday. The Huskies held off Saint Joseph's 89-81 in overtime.
No. 15 seed Milwaukee (21-14), the surprise champion of the Horizon League, made it a game all the way, leading much of the first half before fading late.
Villanova was eager to get back on the court after being upset last week by Seton Hall in the Big East quarterfinals, but the effect of that loss seemed to linger.
A 14-point run spanning halftime gave the Wildcats a nine-point lead early in the second half and they held on. Hilliard's long 3-pointer from the top of the key with 8:10 left gave them a 53-42 advantage, and the Panthers couldn't recover.
James Bell had 12 points for Villanova on 5-of-14 shooting and missed all eight 3s he attempted. Kris Jenkins and Josh Hart each scored 11.
Austin Arians had 17 points to lead Milwaukee and Matt Tiby scored 10. Jordan Aaron, Milwaukee's leading scorer, finished with six points, all in the second half, on 1-of-15 shooting. Kyle Kelm, second in scoring, had eight points, all after the break.
The Panthers' rags-to-riches march into the tourney ended, but not without a fight.
Villanova outscored Milwaukee 46-20 in the paint and had 19 fast-break points to overcome a woeful 4-for-23 shooting performance from behind the arc.
After struggling mightily, Villanova scored the final nine points of the first half and the first five of the second. Pinkston's three-point play and follow gave Villanova a 32-23 lead.
Kelm's first basket of the game, a layup off the glass, stopped a scoreless skid that had lasted more than 6 minutes and cut the lead to seven.
After Aaron missed an open 3, Hart countered with a three-point play for Villanova and Jenkins followed with a 3 in transition after blocking a shot by JeVon Lyle at the other end. That gave the Wildcats a 42-33 lead midway through the half.
Villanova extended the margin to 55-44 on Hart's layup with 7:19 left, and the Panthers never got closer than nine the rest of the way.
Milwaukee closed the season with five straight wins, including a surprising overtime win over preseason favorite Green Bay in the Horizon Conference tournament, to surpass the 20-win plateau.
Not bad for a team that finished 8-24 a year ago. Milwaukee's 13-win increase was the best year-to-year improvement in the country, and the Panthers were the only team in the NCAA tournament that finished last in its league a year ago.
They showed they belonged on the big stage, too, leading a team ranked in the top 10 for much of the first half.
Both defenses swarmed right from the opening tip. The Panthers missed their first six shots, getting one of them blocked, and fell behind 6-0. Even high attempts off the glass on drives misfired as the Wildcats tried to set the tone early despite faltering from the field.
Halfway through the first half, Villanova led 10-8, the teams were a combined 6 for 29, and the Wildcats were scoreless on five tries from behind the arc.
Clearly, the Panthers weren't intimidated by the Big East regular-season champions, and J.J. Panoske hit an open 3 from the left wing to give Milwaukee a surprising 13-10 lead with 8 minutes left in the period.
The Panthers play in the Wisconsin style that coach Bo Ryan brought to Milwaukee before he took over the Badgers, whipping the ball around looking for the open man.
After Bell's steal and slam gave Nova a 16-15 lead, a wide-open Arians hit consecutive 3-pointers from the right side for a 21-16 lead with 4:52 left as the Panthers' fans cheered.
The Wildcats finally settled down, holding the Panthers scoreless for the final 4:05 of the period.
Hilliard's three-point play tied it at 23, and a driving layup by Bell and a slam dunk by Pinkston put Villanova back on top.
Villanova went into the break with a 27-23 lead despite missing all 12 attempts from behind the arc, six by Bell.
Villanova averaged nine 3s per game this season and shot 36.1 percent from long range, but the Wildcats allowed opponents to hit 35.4 percent of their 3-pointers and the Panthers took advantage, hitting five before the break to stay in the game.
Milwaukee relies a lot on Aaron, its leading scorer at 15 points per game. He had four assists and four rebounds but failed to score in the first half, missing seven shots.
Kelm, averaging 12.6 points, also went scoreless.