Jonas Valanciunas had 10 points and a game-high 15 rebounds.
Paul George led Indiana with 26 points.
Toronto went up by 16 points when Powell drilled a three-pointer and then swiped the ball away from Indiana on the next possession for a Joseph bucket. But in a roller-coaster series where no lead has been safe, the Pacers pulled to within three points with 2:36 to play when Monta Ellis drilled a three.
A pair of George free throws made it a three-point game with 53 seconds to play, but DeRozan grabbed a huge steal off George on the Pacers’ next possession and then calmly sunk two free throws with 6.5 seconds to play to secure the victory.
DeRozan, who has struggled all series, came up big when it counted in his strongest game of the seven, and when he spun off a Pacers defender with two minutes left in the third quarter, the crowd roared its approval.
The Maple Leaf — laid out in a pattern of red and white T-shirts — provided the Air Canada Centre backdrop. And the crowd that included Drake, Montreal Canadiens star P.K. Subban, and Blue Jays Josh Donaldson, Jose Bautista and Marcus Stroman, was electric, in full voice from the opening jump ball.
Outside, thousands of Raptors fans braved the chilly weather to watch the game on the giant screen in Maple Leaf Square.
The Raptors’ only previous playoff series victory came way back in 2001, when they knocked off the New York Knicks in a five-game series. After last year’s four-game debacle at the hands of Washington, they’ve played under heavy expectations.
“This is a great basketball market, the players have built up the expectations and done a great job of it and these are the consequences of it,” coach Dwane Casey said before tip-off. “I feel like our players have embraced it.
The Raptors looked solid in the first quarter, and backed by 13 points from DeRozan, took a 28-23 lead into the second.
Powell pushed the pace for Toronto in the second with 10 points, including a pair of threes, and the Raptors went into the dressing room at halftime up 50-44.