United were sunk 2-1 by promotion-chasing Ipswich Town at Glanford Park, going down to their third straight loss.
Goals midway through each half from the Spanish pairing of Pablo Counago and Sito put paid to Scunthorpe's hopes of gaining three invaluable points in the race for Championship survival.
The home team never got going as an attacking force and, as a result, the Tractor Boys took full advantage.
Ben May pulled a goal back for Nigel Adkins' men before the end, but the visitors held on.
The most controversial incident of the afternoon came early in the second half as Jack Cork and Counago were both sent off for an off-the-ball incident.
The Iron are now six points adrift of safety, with just six matches left.
United went into the game making no changes from the team which lost 2-1 at Wolverhampton Wanderers in midweek.
Grant McCann, who injured his knee in the match, was passed fit for the game, while Jack Hobbs and Izzy Iriekpen were missing from the substitutes' bench with sickness and diarrhoea.
With a biting wind affecting the quality of the football, both teams struggled to gain a foothold in the opening period.
It had started in a scrappy manner and neither side were showing the urgency required with so much at stake.
Iron boss Adkins was urging his charges to push up and their play steadily improved. Geoff Horsfield had a decent opportunity to head Scunthorpe ahead at the far post after a cross from Baraclough, but he nodded just wide of Stephen Bywater's left-hand post.
And then came a real suckerpunch for the hosts as Ipswich went ahead on 19 minutes.
It was their first meaningful attack of the game, as Alan Lee combined with Counago - for the latter to find himself one-on-one with Joe Murphy. He promptly slotted the ball past the Irishman and the visitors, backed by a healthy following, celebrated their lead.
For the remainder of the first period, the hosts continued to struggle to get into any rhythm and it was Ipswich who looked most likely to score the next goal.
Both sides were restricted to half chances, although United could have levelled on 41 minutes when Andy Butler headed wide after McCann's corner from the right.
The second half began in controversial fashion, with the Iron's Cork and Town's Counago both dismissed for an off-the-ball incident. Referee Ian Williamson took his time, but both players were forced off.
Just prior to that, the Tractor Boys had the first chance of the second half when Owen Garvan flashed an effort just over Murphy's crossbar.
On 60 minutes, the Iron were drawn into a double change when May replaced Ian Baraclough, who had made his 700th career appearance, and Curtis Weston came on in place of Matt Sparrow. Jim Goodwin and Ian Morris would operate as makeshift right-backs when Scunthorpe were in defensive mode.
They managed to register a shot on goal just two minutes later, with Martin Paterson's effort drawing a simple stop from Bywater.
Knowing it was a must-win game, United started to attack with more urgency after the changes. Goodwin drilled an effort over the crossbar after good work from Morris on the left.
They kept on pressing, but were having no luck in front of goal - and, on 71 minutes, the visitors were to double their lead through Sito.
The left-back charged forward into the United penalty area and slotted his effort past the onrushing Murphy.
The Iron continued to push forward but were having little luck, struggling to really test Bywater in the Ipswich goal.
Goodwin had an effort from the left-hand side of the penalty area, McCann had a free-kick tipped over the bar from 25 yards, while Andy Butler headed over the crossbar from the subsequent corner.
They did manage to pull a goal back in the 90th minute though when May squeezed in an effort from the right-hand side of the penalty area after being sent through by Weston.
It was his first goal in a United shirt, but it was too little, too late for Scunthorpe.
There was one final change as Andrew Wright replaced Goodwin for his first-ever appearance in an iron shirt, but he did not have enough time to make a contribution.
Referee Williamson blew his whistle for full-time, as the home team rued another lost three points.
Attendance: 6,636 (1,620 away).
Iron Bar man of the match: Joe Murphy.
Sponsors' man of the match: Martin Paterson.
