Gallinari's knee buckled inward as he drove to the basket for a layup in the first half. He gave up the ball, grabbed his knee and hopped to the sideline, where he sat down, writhing in pain as Darren Collison scored at the other end for Dallas.
The team didn't have any immediate word on the extent of his injury, saying only that he was scheduled for an MRI on Friday. There are fears that Gallinari tore his anterior cruciate ligament.
Gallinari is the Nuggets' second-leading scorer at 16.3 points per game. Their top scorer, Ty Lawson (16.7), is out indefinitely with a tear in his bruised right heel.
Corey Brewer replaced Gallinari in the lineup late in the first half Thursday and scored a game-high 23 points.
"You never want to see anybody go down, but especially a guy like Gallo that's so important to us," Brewer said. "So, it's tough. But we have to fight through it. It's going to be tough on us, but we've got to just keep playing hard."
The Nuggets entered the game third in the Western Conference in their quest for home-court advantage in the first round of the NBA playoffs, a task that will be a whole lot harder without Gallinari.
Information from The Associated Press was used in this report.