Danny Granger scored 15 of his 16 points in the second half as Indiana overcame a 20-point deficit to pick up its second straight win.
Washington squandered an opportunity to post back-to-back wins for the first time in over a month.
After shooting 32 percent in the first half and struggling on the defensive end, the Pacers were a completely different team after the break.
Roy Hibbert scored 13 of his 19 points in the second half and added nine rebounds as Indiana boosted its lead to a full game over Atlanta for the No. 5 spot in the Eastern Conference.
Indiana was within a basket five times in the fourth quarter before finally grabbing the lead, 84-83, when Paul George knocked down a 3-pointer with 1:00 left. The Wizards turned it over on the ensuing possession and Darren Collison split a pair of free throws with 9.5 on the clock.
Washington called a timeout but John Wall could not get his floater in the lane off on time.
The Pacers fell behind, 51-31, at the break but made a move to get back into it in the third quarter. They locked down on the defensive end and got 11 points from Granger in the period to draw back within 66-57.
The Wizards scored the first basket of the fourth quarter to get it back to double digits but the Pacers responded with a 9-0 run to draw within a bucket.
GAME NOTEBOOK: Indiana shot 51.3 percent in the second half ... G Jordan Crawford scored 21 points and Wall collected 16 points and nine assists to lead Washington ... After being outrebounded 24-14 in the first half, the Pacers got the better of the glass, 26-11 in the second.