Melo, who was playing in Madison Square Garden for the first time since rumors started swirling about a possible trade between the two teams, did not disappoint the home town fans, scoring 31 points but went 0-6 from three point land. He also led the team in rebounding with a game-high 13.
Amare Stoudemire scored 24 points in the second half for the Knicks, registering at least 30 in a game for the seventh straight contest, setting a Knicks franchise record.
Chauncey Billups, who looked to have broken out of a mini-slump on Friday, was held to 4 point on 1-7 shooting. His lone make was a game-tying 3-pointer with 1:17 left in the game to knot the score at 120. Mr Big Shot led the squad in assists with six.
Ty Lawson had his second great game on the four-game road trip, scoring 18 on 6-7 shooting form the field and 6-7 from the line. Nene contributed 26 and Al Harrington 19 in Harrington's first return to MSG after leaving New York for Denver.
The Knicks had six players in double figure as Stoudemire, Wilson Chandler, Landry Fields, Raymond Felton, Danilo Gallinari and Toney Douglas all scored over 10 points.
For the road trip the Nuggets went 1-3.