McGrady finished with 19 points but shot 7-for-22 from the field in the Pacers' 81-76 victory Tuesday night. He had seven turnovers, including two critical ones in the final two minutes while the Rockets were trying to come back.
McGrady had missed seven games with back spasms.
"It's pretty tough being out," McGrady said. "This league is too good to come back and think you're going to have an impact right away. I thought I did some things great out there, but for the most part, I was a little rusty, fatigued. Made a lot of fatigue mistakes and it's just going to take me a few games to get into game shape."
Indiana's Stephen Jackson, who guarded McGrady for most of the game, said it still was a tough matchup. McGrady averaged 19 points, six rebounds and six assists before sitting out.
"He's one of those guys that you've just got to make him work," Jackson said. "You've got to make him take tough shots. You've got to let him know you're there the whole game. He's not one of those guys you can flat out stop."
The Pacers allowed a season-low point total for the second straight game, and did it without their enforcer, Jermaine O'Neal. The 6-foot-11 center, who leads the league in blocked shots and tops the Pacers in scoring and rebounding, sat out with flu-like symptoms.
The Rockets were playing their first game since All-Star center Yao Ming was lost for at least six weeks with a fractured bone beneath his right knee. Indiana forward Al Harrington took advantage with 23 points and 14 rebounds.
"We wanted to get the ball inside to Al and he delivered a lot tonight," Indiana coach Rick Carlisle said. "We knew we needed Al to have a big game and get four or five guys in double figures."
Indiana pulled ahead 74-73 when Foster made the first of two free throws with 1:44 remaining. On the next possession, McGrady tried to drive but Tinsley stripped him, eventually leading to Harrington's bucket with 49 seconds left.
McGrady missed a jumper, then turned the ball over again, leading to Granger's two free throws with 20 seconds left that increased Indiana's lead to 78-73.
Alston came back with a 3-pointer for Houston with 16 seconds left to cut Indiana's lead to 78-76.
Indiana's Darrell Armstrong made the second of two free throws with 16 seconds left to bump the lead to 79-76. Houston's Luther Head missed a wild 3-pointer as the clock wound down, and Armstrong rebounded and made two free throws to seal it.
The Rockets fell to 14-7 with McGrady in the lineup.
Houston had possession in the closing seconds of the first half with the teams tied at 39, but the Rockets turned it over and Jackson made two free throws with 0.8 seconds left in the half to take a 41-39 lead into the break. Indiana shot 29 percent from the field in the first half but had 12 offensive rebounds and forced 13 turnovers.
The Rockets opened the second half on a 13-4 run that included a 3-pointer and a 3-point play by Battier to take a 52-45 lead.
The Pacers stayed close with three baskets by Harrington, and a jumper by Jackson gave the Pacers a 60-58 lead with 2:58 left in the third quarter. Indiana held the Rockets scoreless for the last 4:14 of the period and led 62-58 after three.
The Pacers held Houston to 23 percent shooting in the fourth quarter.
"We didn't play well offensively," Houston coach Jeff Van Gundy said. "You can't turn the ball over like we did tonight and expect to win, especially on the road. We were discombobulated out there."
- Indiana rookie Shawne Williams got his first career start against the Rockets. The 20-year-old filled in the spot vacated by O'Neal. He didn't score and had two rebounds in 11 minutes.
- After allowing 100 or more points for four straight games, Houston has kept its past four opponents under the century mark.
- Houston F Bonzi Wells, a Muncie, Ind., native, had 11 points and six rebounds off the bench in a return to his home state.