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January 2, 1988: Tennessee 27, Indiana 22.

1987 was the Hoosiers' finest season in the 40 years since 1967. IU whipped Ohio State 31-10 in Columbus and beat Michigan in Bloomington. The Hoosiers lost to Michigan State in November in a game that decided the Big Ten championship and headed to Atlanta to play Tennnessee, a 9-2-1 team with only one SEC loss. Here's the box score (click for full size version):

Tennessee jumped out to a 21-3 lead early in the second quarter, but IU then scored 21 unanswered points to take the lead. Tennessee scored in the last two minutes to secure the win. While the Vols held Anthony Thompson in check (18 carries, 67 yards), but Dave Schnell passed for 218 yards, including 150 and one touchdown to Ernie Jones. Per the Peach Bowl website, the 58,000+ crowd was then the largest in Peach Bowl history.

While the Hoosiers have played in a defunct bowl (the All-American) and a bowl now played in a different city (Copper/Insight), the Peach Bowl (where IU played twice) is the only bowl that IU has played in a now-demolished stadium. Atlanta's Fulton County Stadium, one of the unlamented circular cookie cutters of the 1960s and 1970s:

The stadium hosted football only until 1991. The Falcons and the Peach Bowl moved to the Georgia Dome in 1992. The stadium was demolished after the Atlanta Olympics.