Karl Hawley's first-half goal kept Scunthorpe's League One survival hopes alive.
He notched the decisive strike of the game from close range on 42 minutes as United emerged 1-0 victors away at play-off chasing Milton Keynes Dons.
The result means Scunthorpe still have a shout of staying up on goal difference, if they beat Swindon at Glanford Park next week and Colchester lose at Carlisle.
The Iron entered the game at stadium:mk making three changes from the side beaten 2-1 at Bury in midweek.
Sam Slocombe replaced Eirik Holmen Johansen in the starting eleven for his first start since March 2 after overcoming a thigh injury, while David Mirfin came in for broken nose victim Niall Canavan.
Meanwhile, Eddie Nolan had been struggling with a knock and was replaced by Christian Ribeiro.
Slocombe started in goal, with Ribeiro, Mirfin, Paul Reid and Tom Newey forming the defence.
The midfield consisted of Mark Duffy, Michael Collins, Jimmy Ryan
and Anthony Forde, while Karl Hawley and Matt Godden led the attack.
The substitutes were Johansen, Mike Grella, Robbie Gibbons, Luke Hornsey, James Alabi, Hakeeb Adelakun and Callum Howe.
The Dons had the first attempt on goal in the first minute, with Slocombe having to get down low to save Patrick Bamford's low drive.
Then, in the 14th minute, after the hosts had most of the early possession, Jon Otsemobor sent a header over the crossbar after a right-wing cross as the pressure continued.
On 20 minutes, Scunthorpe registered a first shot on goal when Duffy's right-footed effort, after being teed up by Forde, was deflected over the crossbar.
The same duo combined three minutes later, with Forde teeing up Duffy. whose drive was tipped around the post.
Then, from the subsequent corner, Reid's header from a Duffy cross looped onto the crossbar and bounced to safety.
In the 30th minute, Slocombe was drawn into a further save when Bamford received the ball on the edge of the area and fired a shot towards goal which the 'stopper easily handled.
The hosts had another chance three minutes later when Chadwick cut inside before driving a low effort just wide of the Iron goal.
Then, on 39 minutes, Powell was teed up before ramming over the crossbar for the hosts.
However, just two minutes later, Scunthorpe were ahead as Ryan outmuscled a Dons defender on the right flank and sent in a low powerful cross for Hawley, who bundled the ball home into an empty net.
The Dons began the second half with more urgency, and Shaun Williams had a shot parried away by Slocombe two minutes after the break.
Then, from a corner a minute later, Otsemobor forced the ball over the crossbar with a volley.
They continued the pressure and Slocombe was forced into a smart double save on 53 minutes, firstly blocking a Powell shot with his hands and stopping Bowditch's rebound with the back of his leg before the ball was cleared to safety.
The hosts were the dominant force as the second half wore on but United continued to soak up the pressure.
Slocombe was forced into a great save to stop Lowe from close range on 70 minutes as the game reached a tense crescendo.
He was then drawn into another fantastic stop three minutes later, this time from Potter's powerful drive as the pressure continued.
There was a Scunthorpe substitution with 15 minutes left as Godden was replaced by Alabi.
Slocombe was drawn into yet another superb point blank save on 80 minutes when Chadwick cut inside from the right before drilling an effort which the shotstopper had to tip away before his team-mates cleared to safety.
With five minutes left, Forde was inches away from scoring when Ian McLoughlin fumbled his kick out and the Irish winger smashed a powerful low effort which cannoned back into play off the post.
Catching the Dons on the break in the dying stages, Alabi then played in Hawley whose powerful low drive from the edge of the area was deflected wide by McLoughlin.
There were three minutes of added time, but the Dons couldn't break down a resolute Scunthorpe defence, who held on for a huge away win.
The Iron's final game of the season comes next Saturday when they host Swindon Town.
Milton Keynes Dons:
McLoughlin, Otsemobor (Lowe, 61), Kouo-Doumbe (Lines 82), Kay, Williams, Potter, Gleeson, Powell, Chadwick (McLeod, 82), Bowditch, amford.
Smith, Baldock, Galloway.
Slocombe, Ribeiro, Mirfin, Reid, Newey, Duffy, Collins, Ryan, Forde, Hawley, Godden (Alabi, 76).
Johansen, Grella, Gibbons, Hornsey, Adelakun, Howe.