The Michigan Wolverines are now 1-2 on the season following a 38-21 loss in Indiana.
The Hoosiers move to 3-0 with the win.
Michigan quarterback Joe Milton threw for 344-yards and three touchdowns in the loss.
Next up for the Wolverines, a home game against number-10 Wisconsin next Saturday night at 7:30pm.
Elsewhere, the Iowa Hawkeyes rolled over the Michigan State Spartans 49-7 to pick up their first win of the season.
The Spartans are now 1-2 on the year.
Michigan State will try to turn things around next Saturday as it hosts 13th ranked Indiana for a noon kick off.