A superb free-kick from Tommy Miller eight minutes from time extended Town's unbeaten run at home to 15 games.
The midfielder curled the ball past Joe Murphy from the edge of the box to score his third goal of the season after Scunthorpe had been penalised for handball.
Martin Paterson gave the visitors the lead on 15 minutes but goals from Pablo Counago and Owen Garvan in the space of three minutes put Blues back in command until Paterson struck again just past the half hour.
Jim Magilton kept with the same side that beat Leicester in midweek, Miller, Shane Supple and Alex Bruce all returning to the squad and starting on the bench.
Town had a penalty claim inside the first two minutes, Danny Haynes going down inside the box under a challenge from Marcus Williams but referee Jarnail Singh was on the spot to wave away the appeals.
Paterson couldn't convert at full stretch from six yards in Scunthorpe's first attack , the striker almost gifted a second chance straight after from Haynes' wayward backpass.
The visitors stunned Town on the quarter hour, Paterson sliding the ball in after Morris' long range shot had hit the underside of the bar, the ball appearing to bounce over the line before Paterson made sure.
Town responded immediately, Gavin Williams' free-kick flicked back superbly by Jason De Vos and Counago did the rest from three yards.
Paul Hayes had a shot blocked by Fabian Wilnis before Town made it two goals in three minutes, Counago's slide rule pass sending Garvan clear and the Irishman rounded 'keeper Joe Murphy before finding the net with an excellent right foot finish for his first League goal of the season.
Scunthorpe continued to create chances, Wilnis giving the ball away on the edge of the box, Kevan Hurst firing over.
Counago was again at the centre of most of Town's attacking threats, the Spaniard sending Jon Walters clear on the left with an intelligent pass, then taking the return in his stride and hitting the bar with a left foot effort from 12 yards.
Garvan tested Murphy in the Scunthorpe goal from 25 yards before Nigel Adkins' side levelled the scores just past the half hour, Paterson finishing calmly after Williams had deflected the ball into his path.
Murphy clawed Williams' shot to safety, Garvan volleyed over from Alan Lee's head back from a corner, Counago and Walters then linking up to send Garvan clear but the midfielder couldn't make it count.
The half finished with a Counago strike blocked by Andy Crosby, the Town striker firing the rebound over the bar.
Haynes exploded a shot high and wide in the opening seconds of the second-half, while at the other end Wilnis cleared a Hurst cross as Paterson threatened, Lee then clearing after a goalmouth scramble.
Garvan had a shot hacked clear after good work by De Vos, then Haynes blasted wide from 12 yards as Town pressed for a third but it needed a save at full stretch from Neil Alexander to keep out Paterson's header from Hurst's cross.
Miller replaced Williams just before the hour in Town's first change, Murphy at full stretch to keep out De Vos' lofted ball across goal.
Blues camped around the Scunthorpe goal, Counago denied by Crosby's block six yards out, Garvan then seeing a volley beaten out by the Iron defence. Lee's header kept out on the line by the post and desperate and brave defending as Counago tried to convert from inches.
Jim Goodwin was the first player to see yellow on 70 minutes following a challenge on Miller, Scunthorpe then making a second change Cleveland Taylor replacing the injured Andy Butler.
Murphy held at the nearpost from Haynes' cross as Blues looked the more likely to score, Walters testing the 'keeper with a low drive.
Billy Clarke replaced Haynes on 78 minutes, De Vos heading over from a corner.
With eight minutes left Town were awarded a free-kick on the edge of the box for handball, Miller curling a sublime kick past Murphy into the corner of the net. Scunthorpe immediately bringing on Tomi Ameobi for Hayes and Jon Forte for Paterson.
Counago blasted wide after exchanging passes with Clarke, Garvan's strike going inches wide following a deflection before referee Singh brought an end to the 90 minutes as Blues moved up to sixth with Burnley the visitors to Portman Road next week.
Town: Alexander, Wright, De Vos, Wilnis, Sito, Haynes (Clarke 78), Garvan, Williams (Miller 58), Walters, Lee, Counago. Subs not used: Supple, Bruce, Trotter.
Scunthorpe: Murphy, Cork, Crosby, Butler (Taylor 70), Williams, Hayes (Ameobi 83), Goodwin, Baraclough, Hurst, Morris, Paterson (Forte 84). Subs not used: Lillis, Mulligan. Booked: Goodwin.
Att: 19,306


















