Louisville and Kentucky are ranked second and third respectively in the Top 25 pre-season poll released on Friday.
The Cardinals, who lost to their in-state rival and the eventual national champion Wildcats during last year's Final Four in New Orleans, received 20 first-place votes and 1,568 points overall.
Louisville returns much of last year's team, led by junior guard Russ Smith, senior guard Peyton Siva, junior center Gorgui Dieng and sophomore forward Chane Behanan.
Kentucky, which replaced six players — all picked in the NBA Draft — from that title team with blue-chip recruits Nerlens Noel, Archie Goodwin, Alex Poythress and Willie Cauley-Stein, received 1,453 points and two first-place votes.
Indiana (1,592, 43 first-place votes) is the pre-season No. 1.
The Cardinals and Wildcats play on Dec. 29 in Louisville.
Though Louisville Coach Rick Pitino and Kentucky's John Calipari expected the high rankings, neither said their rosters looked worthy of top-three consideration at this point.
After Wednesday night's Blue-White Game in Lexington, Calipari grabbed the microphone and jokingly addressed the crowd of 12,016 at Rupp Arena with a rhetorical question:
"There's a lot of work to be done, but we've got good guys that want to get better," the coach said. "But do you know why whoever picked us to be in the top five needs to be drug tested?"
Pitino, whose Cardinals play their final intrasquad scrimmage on Saturday, offered a more cautious assessment.
"I think we're a work in progress," he said after Sunday's scrimmage. "I think I'm impressed with what I see, but I don't think we're anywhere near our potential.
"We've just got to teach a lot of different things to a lot of different people. That's the fun part about being a coach."
Indiana's No. 1 ranking was a first for the Hoosiers since 1979-80, when they were coached by Bob Knight and the three-point line was still in the experimental phase.
The Hoosiers, who return all five starters including 7-foot sophomore Cody Zeller, received 43 first-place votes from the 65-member national media panel. Indiana is a pre-season No. 1 for the third time.
This is the fifth time that Indiana, Louisville and Kentucky were all ranked in the pre-season top 10. The last time was 1983 when Kentucky was No. 4, Louisville No. 8 and Kentucky No. 9.
Indiana's other pre-season No. 1 was in 1975-76 when the Hoosiers put together the last unbeaten run to a national championship.
Ohio State and Michigan joined Indiana as Big Ten teams ranked in the top five. The last time a conference had three teams in the preseason top five was 2008-09 when Connecticut, Louisville and Pittsburgh of the Big East were second, third and fifth, respectively.
North Carolina State, Kansas, Duke, Syracuse and Florida round out the top 10.
North Carolina led the second 10 and was followed by Arizona, UCLA, Michigan State, Missouri, Creighton, Memphis, UNLV, Baylor and San Diego State.
The last five ranked teams were Gonzaga, Notre Dame, Wisconsin, Cincinnati and Florida State.
The Big Ten led the way with five teams in the preseason poll, while the Big East and Atlantic Coast Conference had four each. Along with the Southeastern Conference's three teams, those four leagues accounted for 16 of the 25 teams.
Coach Tom Crean took over an Indiana program in 2008-09 that had plenty of history — five national championships — and a lot of current problems. Only two players returned from a team that was facing NCAA discipline over a phone call scandal that led to the ouster of coach Kelvin Sampson.
The program was back on the national scene last season when Christian Watford's three-pointer at the buzzer beat No. 1 Kentucky and the fans rushed the court at Assembly Hall. Three straight losing seasons seemed long ago as the Hoosiers added two more wins over teams ranked in the top five and got back in the NCAA tournament.
Now Crean has a team that will start the season No. 1
"It's great. Those things are great," Crean said. "I think now, it's just so much about the daily challenge of getting better. That to me is what the focus is. It's a big deal, but you don't get any banners for your preseason rankings. You've got to go out and you've got to earn it every day. I think that's what this team is really doing a good job of, and I know it's early, but they're doing a good job of it."