Russ Smith led all scorers with 36 points for Louisville (5-1), which came into the game on a school-record 21-game winning streak. Chris Jones added 20 points.
It was a three-point game with just over 13 minutes left when Louisville's Montrezl Harrell picked up his fourth foul. North Carolina scored the next eight points.
Harrell fouled out driving to the basket with 7 ½ minutes left, exiting the game with just five points and eight rebounds. With the sophomore star out of the game, North Carolina pushed the lead to 16 points at 83-67, outmuscling the Cardinals under the basket.
North Carolina won the rebounding battle 40-35, after the Cardinals had outrebounded their opponents by better than 14 in each of their last two games.
The teams combined for 50 fouls and that affected Louisville's press, forcing the Cardinals to play further off their men.
Paige hit 9 of his 12 shots from the floor and was 11 of 11 from the foul line.
But it was the Russ Smith show early, as he had 22 points in the first half.
He and Jones were a combined 10 of 19 from the floor before intermission, while the rest of the Cardinals hit just three of 13 shots.
Both teams started hot, making a combined 10 of the first 12 shots taken from the floor. A pair of 3-pointers from Smith and one from Jones helped Louisville to an early 19-10 lead.
Brice Johnson's block of a Harrell dunk attempt brought the surprisingly partisan UNC crowd into the game. His rebound dunk and foul shot cut the Louisville lead to 33-31, but Smith answered with his fourth 3-pointer of the half.
The Tar Heels scored the next six, taking the lead on a pair of free throws by Paige at 37-36.
The teams went back and forth from there before Paige buried a long 3-pointer at the halftime buzzer to tie the score at 44.
Louisville, which was playing its first games away from home during this tournament, had not lost since last Feb. 9 when it dropped a five-overtime affair to Notre Dame.
North Carolina has been playing this season without P.J. Hairston, who was the Tar Heels' leading scorer a year ago, and senior guard Leslie McDonald. Neither traveled to the tournament because NCAA eligibility concerns.
Authorities twice cited Hairston during the offseason while he drove rental cars linked to a felon. The school hasn't specified McDonald's issue, though it sent a letter ordering a company making designer mouth guards to stop using McDonald on its web site over the summer.
North Carolina dropped from 12th to 24th in the AP Poll after falling to Belmont, the first loss by the Tar Heels to an unranked non-conference opponent at home since February, 2002. The Tar Heels missed 26 free throws in that game.
They were 26 of 38 against Louisville after making 26 of 38 against Richmond.
The Tar Heels are now 9-3 against Louisville. The two perennial powers hadn't met since the 2008 NCAA Tournament, a game also won by UNC.