Two goals from Steve Kabba gave Sheffield victory with Town having a Darren Currie penalty saved and Sito picking up a red card late in the game.
Kabba struck five minutes into the game and then clinched victory right at the end as Blues chased an equaliser.
That equaliser could have come just before the hour mark but Currie's penalty was saved by Paddy Kenny.
Sito became the second Town player to be dismissed in successive away games when he was sent-off for a second booking five minutes from time.
Joe Royle made five changes to the team that went down to Preston with Jay McEveley making his debut for Town and Jason De Vos returning from injury.
But Blues hardly had time to settle before Lewis Price was picking the ball out of the net, Kabba firing in from the angle just inside the penalty area.
Blades, buoyed by the goal,surged forward and Paul Ifill failed to test Price from a good position, then fired into the sidenetting after leaving McEveley in his wake.
Kabba then brought a save from Price before Sheffield should have added a second on the quarter hour, Neil Shipperley seeing his shot kept out by Price's feet when only six yards out.
Richard Naylor was then booked for a foul on Kabba, whose pace proved a problem to the Town defence.
Blues could have had a penalty on 28 minutes though, De Vos appearing to be pushed as he looked to get on the end of a Currie free-kick.
Kevin Horlock then sent another free-kick inches wide of Paddy Kenny's goal as Town began to get a foothold in the game.
Jaime Peters, restored to the starting line-up on the right side, beat former Town loanee David Unsworth on the run but his cross evaded Sam Parkin while at the other end Kabba brought a brilliant save from Price at the near post.
Horlock picked up a yellow card for a foul on Ifill just before the break with Leigh Bromby having the final shot of the first 45 minutes, sending a drive just wide.
Town began the second-half brightly and on 56 minutes referee Phil Dowd pointed to the penalty spot after Sito was brought down by Kabba. Currie took the kick but it lacked pace and Kenny made a comfortable save.
At the other end Kabba found the sidenetting with a terrific strike before Town made a change, Dean McDonald replacing Dean Bowditch.
Price was then bizarrely booked for what appeared to be time-wasting when the Welsh U21 international delayed his goal-kick after spotting a second ball was on the pitch.
Nick Montgomery brought another save from Price as the game entered the last 15 minutes, with Sheffield then making their first swap, Keith Gillespie replacing Ifill.
Peters showed more of his obvious talent with a run that left Montgomery and Unsworth on the deck but the Canadian international failed to make his final pass count, Craig Short clearing the eventual danger.
Sito became the fourth Town player to be booked after bringing down Alan Quinn and five minutes from time the Spaniard was dismissed after picking up a second yellow card for a foul which is likely to see him miss the Southampton game.
Kabba grabbed his second as the game went into injury time, breaking clear of Currie as Town pushed forward looking for an equaliser to keep Blades at the top of the table and Neil Warnock celebrating a League win over a Joe Royle managed Ipswich side for the first time in seven attempts.
Town line-up: Price, Sito, Naylor, De Vos, McEveley, Peters, Magilton, Currie, Horlock, Parkin, Bowditch (McDonald 65). Subs not used: Wilnis, Supple, Richards, Garvan. Sent-off: Sito. Booked: Naylor, Horlock, Price.


















