Goals from Spanish duo Pablo Counago and Sito gave Blues a deserved win at Glanford Park.
It was a bitter sweet game for Counago though with the Town striker seeing red early in the second-half after a bust-up with teenager Jack Cork.
The summer signing from Celta Vigo gave Town the lead in the first-half with his 12th goal of the season, finishing off expertly after linking up well with Alan Lee.
Sito had the Town fans in raptures midway through the second-half with a fantastic individual strike, his first for the Club, beating three players before beating Joe Murphy with a exquisite finish.
Substitute Ben May gave Scunthorpe a glimmer of home when he scored three minutes from time but Blues held on without any scares.
Town boss Jim Magilton made one change from the side that beat Charlton last week, Danny Haynes coming in for the injured David Norris on the right flank.
New loan signing Danny Simpson started on the bench after arriving from Manchester United on Friday.
A swirling wind made football difficult in the first-half, Town adapting to the conditions better, Lee and Counago both denied by Andy Crosby and Andy Butler challenges in the first quarter hour.
Geoff Horsfield sent Scunthorpe's first effort high and wide before Town took the lead on 19 minutes, Lee and Counago combining well and the Spaniard beat the offside flag and calmly put the ball past Joe Murphy to join Jon Walters at the top of the Blues' goalcharts.
The home side responded with a long range strike from Ian Morris that Stephen Bywater watched go just wide.
Owen Garvan, Lee and Counago then linked up well but Crosby was in the right place to clear from Lee's run in on goal.
Cork, 18-year-olds, showed a great touch to head Haynes' cross back to his 'keeper Murphy as Counago challenged.
Another Haynes cross after good work by Sito saw Lee strike at goal but the ball was deflected up into Murphy's hands. Lee then denied after a brilliant pass by Counago had found him on the edge of the box.
Counago had an opportunity to extend the lead 10 minutes from the break, the frontman shooting straight at Murphy from the angle, then showing good vision to almost release Haynes with a pass.
Martin Paterson escaped Town's marking for the first time, the Northern Ireland international finding Grant McCann who set up Jim Goodwin but Velice Sumulikoski threw himself in the way of the goalbound shot.
The first real action of the second-half saw referee Iain Williamson show red cards to Counago and Cork for a scuffle just four minutes into the break. Geoff Horsfield then picked up a booking.
Scunthorpe made two changes just before the hour, May and Curtis Weston on for Ian Baraclough and Matthew Sparrow.
Paterson called Bywater into action as Scunthorpe looked to claw their way back into the game, Goodwin then firing wide from the edge of the box.
Lee and Garvan were both denied by resolute Scunthorpe defending, while at the other end May threatened as Paterson's trickery caused problems for Blues.
Town silenced the home fans though on 71 minutes when Sito scored one of the goals of the season, carving his way past three defenders before calmly putting the ball past Murphy and into the net.
Blues made a double change straight after the goal, Haynes making way for Simpson, Sumulikoski doing the same for Tommy Miller.
Simpson was straight into the action, the loanee getting on the end of a Lee head on but Murphy made the block.
Ian Morris became the second home player to be booked after a foul on Lee, the free-kick cleared by Butler as Jason De Vos challenged.
Bywater saved well at his near post in the closing stages, Jordan Rhodes coming on for Lee for the final five minutes.
May gave the home side some hope with a goal as the game entered injury time, the former Millwall man left unmarked to score from close range at the near post.
Simpson picked up a yellow card for kicking the ball away but Blues saw out the remaining two minutes to stay firmly in the hunt for a top six finish with a third away win of the season.
The only downside is that Counago now faces a three match suspension, if as expected he was sent-off for raising his hands.
Scunthorpe: Murphy, Cork, Crosby, Butler, Baraclough (May 59), Sparrow (Weston 59), Goodwin (Wright 90), McCann, Morris, Paterson, Horsfield. Subs not used: Lillis, Hayes. Sent-off: Cork. Booked: Horsfield, Morris
Town: Bywater, Wright, De Vos, Bruce, Sito, Haynes (Simpson 72), Sumulikoski (Miller 72), Garvan, Quinn, Lee (Rhodes 85), Counago. Subs not used: Colgan, Roberts. Sent-off: Counago. Booked: Simpson.
Att: 6636
