Indiana made its first six shots from the field, including four 3-pointers, to take an 18-7 lead, and the Hoosiers extended the advantage to 26-11 on a breakaway layup by Zeller.
Michigan started to find its footing midway through the first half. Hardaway made a layup to cut Indiana's lead to 28-17, and later, McGary scored in close on a lob by Stauskas to make it 28-21. A dunk by Jon Horford made it a five-point game with 5:37 left in the first half.
Michigan knocked its deficit down to five again on another basket by McGary, but Zeller scored on a thunderous putback dunk on the other end with 37 seconds left in the first half. Burke hit a deep 3-pointer at the buzzer to cut Indiana's lead to 36-32 at the break.
Burke led the Wolverines with 14 points at halftime. Indiana might have led by more if not for 10 first-half turnovers.
Beilein said he won't let his team settle for being happy with making a game of it after looking as if it might get blown out.
"We can't be patting each other on the back with moral victories and things like that," he said. "We're very disappointed, but we can't dwell on it."
Crean believes there may be more than one meeting with Michigan on the horizon. The teams could meet in the Big Ten tournament, and possibly in the NCAA tournament.
"They truly are that good," he said. "They're going to continue to have a great season. Let's hope we can meet at the end of the year, and we're playing for something really big."
NOTES: Michigan was off to its best start in program history. ... It was just the second meeting between the schools with both ranked in the top five. ... Michigan was the first team in the nation to reach 20 wins. ... Indiana's Oladipo went for a dunk at the buzzer and missed. He worried that he might have offended the Wolverines. "It was no disrespect to Michigan," he said. "I apologize to their team, I apologize to their coaching staff."